Real estate investors have a choice between two investment options: cash flow or appreciation. So, which one is better?
Whenever someone asks me if cash flow or appreciation is better when investing in real estate, I give them a dumbfounded look because they should already know the answer.
CASH FLOW INVESTMENTS PROVIDE A REGULAR STREAM OF INCOME.
In contrast, appreciation investments offer the potential for a more significant return if the investment is sold at a higher price than the purchase price.
Cash flow all day, every day
The home you purchase is already out closing costs in today’s market, and you’d need a 3-10% increase to cover that. In addition, rates continue to stay extremely low, and you can expect a massive drop in value if they increase.
ÂHere’s a tip — never invest for appreciation in a market like this. If you’re going to invest in real estate, make it for the sole purpose of cash flow. Make sure you receive good income month after month from it.Â
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Getting wealthy from real estate investments is possible. You have to focus on cash flow, and the market fluctuation won’t affect you as much.
When buying real estate, buy it for the purpose of future investment. Yes, you can live in it, but keep in mind its value, location, and other things that could lead it to become a cash flow injection.
Do you let your real estate appreciate?
Your home is a liability, not an asset that gives you money. There is no such thing as your home making you money — all it does is give you debt.
Most people believe that purchasing a home is a good investment. “Well, it’ll appreciate and then we can sell it for a good dollar.” Absolutely not. You’ll become poor very quickly using that logic.
