4 Reasons to Invest In Real Estate – Part 1: Cash Flow

We answer lots of questions about why it’s good to invest in real estate. We thought you might want to know our top four reasons for owning investment property!

This is part 1 of a 4 part series of blog posts:

1) Cash Flow
2) Appreciation
3) Paying Down Your Loan
4) Tax Benefits

Cash flow

Cash flow is the profit you have each month after you’ve paid for all of the expenses on your investment property.

Let’s say that you get $2,500 per month in rent. Let’s also assume that your mortgage and property management fees are $1,800 per month, leaving you $700. During the month, you had a garbage disposal that needed to be replaced for $300, leaving you $400 in cash flow.

You might be thinking to yourself that $400 is not going to make you rich. And it probably wouldn’t unless you had multiple properties yielding $400 per month in cash flow… but this is just one of the four reasons investing in real estate is a great investment.

Many of our investment clients own multiple properties that we manage for them.

Let’s say that you were able to buy five properties over the course of 5-10 years. If they were all cash flowing $400 per month, you would have $2,000 per month of passive income. That’s starting to become a number that matters. It’s a number that could allow you to buy the boat you’ve always dreamed about or retire a bit earlier.

Next week, we’ll talk about the second benefit of owning investment property, Appreciation!