Positive Cash Flow


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Cash Flow is the amount of money that flows in and out of your pocketbook every month. When you have more money spent than coming in, you have debt. To have money in the bank or savings, you need positive cash flow. Positive cash flow is having more money coming in every month than you have going out. With ordinary jobs, this can be a tedious budget crunching process. The good news with real estate is the cash comes in, and you decide how much you work.

Cash Flow is pretty interesting. Your real estate properties have their expenses every month, including mortgage, taxes, and insurance. Your tenants pay their monthly rent. The property’s expenses come out of the rent, and whatever is leftover is your cash flow. If the rent is $700 a month and your expenses are $400 a month, your cash flow is $300 every month. That cash flow can be spent, reinvested in other real estate properties, or saved for later. With multi-unit properties, that cash flow is multiplies by the number of units you have. If you have a 3 unit property, your cash flow is $900 a month. If you have a 6 unit property, your cash flow is $1800 a month. As long as your incoming rent is greater than your expenses, you are going to have positive cash flow to work with.

When you select your real estate investment properties, make sure you are carefully choosing your investments and crafting your offers. You can purchase properties for way more than you can bring in as cash flow. This creates a sticky situation. Your real estate business will be left with negative cash flow you will have to compensate for every month. This means you will either have to raise rents or find other ways to pay for it. By choosing properties with smaller asking prices, you will have less risk of negative cash flow.

Of course, real estate has other benefits as well. Properties appreciate in value. This increases their worth and your equity. Each property has tax benefits you can use every year. In addition, you are providing a service which everyone needs, housing. As long as there are people around, they are always going to need a place to live and work.

Positive cash flow is a great income source that real estate investment can provide. If you are interested in real estate investments, contact us at Homevestorsfranchise.com. We have a large variety of real estate investment opportunities as well as real estate franchise opportunities available. Come see what we have for you!

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