Like any other business sector, the real estate industry too has its own set of norms to success. A successful real estate entrepreneur does not grow overnight. It takes ample time and experience to get seasoned with this particular business domain. Education and knowledge about the industry and its latest developments prove to be helpful tools to achieve success in this line of business. However, if one sticks to the basics and does not fumble one is bound to reap the rewards of investing into this sector. Real estate is not rocket science after all.
Cash flow is the single most crucial aspect to consider for every realty investor while putting his or her hard-earned money into business. Cash flow in land and building industry is somewhat similar to dividends in the stock business. At certain intervals of time, whether it is monthly, quarterly, bi-annually or annually, one receives regular cash benefits from one’s investment drives. Unfortunately, inexperienced investors who tread in the sector usually do not invest in real estate for cash flow. Rather, they emphasize on the factor of property appreciation. Value appreciation for any land or building is definitely a major factor as it provides a string of benefits to an investor.
But, value appreciation never occurs on alternate days. In fact, on one can say with surety exactly when the very next round of property appreciation will occur. It may take days, months and even years for that to take place. Moreover, when the market is down, it could take even longer. Meanwhile, one has to pay for mortgage, pay the taxes and keep on spending money on renovation and maintenance of the property.
Thus, a steady cash flow or income generated from the property comes in handy to foot these mandatory bills. This formula is not only applicable for residential properties alone. As such, it finds its successful application as commercial real estate investment strategy as well. It is because of this crucial factor, seasoned investors invariably put their money on realty estates that provide them with regular income.
Cash flow is the single most crucial aspect to consider for every realty investor while putting his or her hard-earned money into business. Cash flow in land and building industry is somewhat similar to dividends in the stock business. At certain intervals of time, whether it is monthly, quarterly, bi-annually or annually, one receives regular cash benefits from one’s investment drives. Unfortunately, inexperienced investors who tread in the sector usually do not invest in real estate for cash flow. Rather, they emphasize on the factor of property appreciation. Value appreciation for any land or building is definitely a major factor as it provides a string of benefits to an investor.
But, value appreciation never occurs on alternate days. In fact, on one can say with surety exactly when the very next round of property appreciation will occur. It may take days, months and even years for that to take place. Moreover, when the market is down, it could take even longer. Meanwhile, one has to pay for mortgage, pay the taxes and keep on spending money on renovation and maintenance of the property.
Thus, a steady cash flow or income generated from the property comes in handy to foot these mandatory bills. This formula is not only applicable for residential properties alone. As such, it finds its successful application as commercial real estate investment strategy as well. It is because of this crucial factor, seasoned investors invariably put their money on realty estates that provide them with regular income.