When it comes to smart investments, real estate is always a great choice! In fact, investing in cash flow properties can be one of the best ways to see a boost in your monthly income. That is, as long as you’ve got a savvy team who can give you accurate advice. So let’s talk about some of the information you should discuss with your team to ensure you’re making the right investment for your portfolio.
Step 1: Identify Your Cash Flow Property Needs and Goals
First of all, we need to discuss your goals. Are you wanting to see immediate, everything-is-handled-for-you (or turnkey) results? Would you rather be more involved in every step of the process? Are you willing to invest more up front to increase value and be able to charge a higher rent? Or perhaps you’re wanting to see an immediate cash flow, but are then willing to reinvest in the property?
As you look at the numbers and your goals, you’ll want to consider the following fees. After all, these could impact your cash flow and your profits:
- Insurance rates
- Property Management Fees (for a more turnkey style investment)
- Mortgage fees
- Applicable HOA or community related fees
- Vacancy expenses
Vacancy expenses can depend on how strong the rental market is in your area. But with a good Realtor to guide you, you should be able to pick a strong rental market so that you can minimize the money you spend advertising for new tenants, cleaning up after old tenants, and paying utilities on empty units.
As you set these goals with your team, we can begin finding the right properties to invest in.
Step 2: Find the Right Cash Flow Properties for Your Investment Portfolio
Now that your goals are set, let’s look at what kinds of properties fit your investment style. Here are some of the most common units to invest in:
- Single Family units, like detached homes
- Multi units, like duplexes or apartment complexes
- Low cost, low maintenance units
- Higher end (and higher rent) units
One of the most fantastic things about investing in cash flow properties is the abundance of choice. Gone are the days of having to invest in a single type of real estate. Rather, pick what will best enhance your portfolio. Your team, including your Realtor, can help you find the right investment property to help you reach your goals.
Step 3: Evaluate Your Investment and Adjust as Needed
Finally, one of the most important steps to any investment is to evaluate. Once your cash flow property is performing, look at how it’s doing. Is it living up to your expectations? How quickly will it help you meet your goals? When you’re able to buy in a strong market, it could even exceed your expectations – bringing you back to consider buying another cash flow property investment.
The possibilities are endless, as is the incoming revenue. That is, as long as your team is able to guide you with sound, market-savvy advice. Make sure your team is complete with one of our Realtors who specializes in cash flow property investments.