One way to think about cash flow investing is to compare it to investing in dividend-paying stocks. Exactly what is cash flow real estate investing? This is where the cash flow approach to real estate investing comes in, which prioritizes money in your bank account now, ready to be redeployed for other investments or simply spent on things you value in life. Investing for future appreciation alone can be tricky, unless you are a committed and strategic long-term buy and hold investor. These investors are generally willing to wait and get the bulk of their expected financial return upon sale.Īnd while real estate markets have historically gone up at about double the rate of inflation, there are pronounced down cycles too, which are difficult to predict. Other types of investors are often more focused on whether their property has the potential to appreciate and what that will mean for their equity position.

You can put cash flow to use in other projects and ventures right away. If you chose the former, then welcome to the real estate cash flow investing club! Near term cash flow is something that a certain kind of investor tends to prefer over uncertain (but potentially lucrative) long-term appreciation.

Let’s ask a simple question: Would you rather have money in the bank today or entertain the promise of seeing money in the bank at some future point in time?

For example, if you’re pulling in $1500/mo in rent and your mortgage, taxes, insurance, and property management fees are running $1000/mo, your net cash flow is around $500/mo. Real estate cash flow can be positive…or negative. When it comes to rental property investing, your “cash flow” is the net amount of money that piles up in or disappears from your bank account each month.

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