Rental4Income

  • Home
  • Investor Profile
    • Pre-Approval Form
  • Articles
    • Cash Flow
    • Finance
    • Investment Tips
    • Real Estate Investing
      • Tampa, FL
    • Real Estate Mentor
    • Rental Property
    • Tampa Real Estate News
    • Turnkey Investment Properties
    • Wholesale Real Estate
  • Videos
  • Glossary
  • Properties
  • Testimonials
  • About
    • Investing in Rental Property
  • Contact

May 23, 2016 By Jorge Vazquez

Cash Flow is King with Real Estate Investing

Cash Flow is King with Real Estate InvestingInvestment properties generate cash flow throughout the real estate cycle. The most agile real estate investors take advantage of changing market conditions throughout the cycle, as the demands of regional markets change.

As a result, experienced real estate investors have a portfolio that is continually generating cash through rental income and property sales.

Cash Flow Generated by Flips and Rental Property

Real estate investors who purchase undervalued rental properties and rehab them, have the option to flip the properties for a respectable profit or convert them into rentals to generate long-term cash flow and profits.

Cash flow can be generated both by flips and rental property, but there are pros and cons that should be considered. In particular, flipping properties can create tax and cost issues that are not an issue with long-term rental property investments.

Therefore, when discussing cash flow, and especially passive income, investing in rental properties is often considered a better choice for many real estate investors.

Cash Flowing Rental Properties

To generate cash and profits from rental property, investors purchase undervalued homes that will generate cash flow. The properties are rehabbed appropriate to the neighborhood and prospective tenants. Then the property is rented out, often making use of a property management company.

Properties are not purchased with appreciation in mind, though they are purchased below market value. Rather, properties are purchased expressly to generate cash flow.

To calculate cash flow, subtract all of the property’s monthly expenses from the rent payment.

But the most important question is how to take a rental property and increase the cash flow.

First, control expenses by buying a property that is undervalued and in a good location for rental properties. Then, rehab the property to a condition to attract desirable tenants, while staying within a strict budget.

Then to increase cash flow, rent to stable tenants that will take reasonable care of the property, in addition to living in the property for an extended period of time. Also, regularly inspecting the property can help control expenses and increase cash flow.

You can further cut expenses by managing your own rental properties, but many investors are more inclined to use a property management company.

Lastly, increasing the rent as the market will bear is the easiest way to generate cash flow, since the increase immediately hits the bottom line, unless you are dealing with delayed maintenance issues or unusually high vacancy rates.

Rental Property Expenses

Some real estate investors like to use the 50% rule for estimating expenses, which states that total expenses (not including mortgage payments) for a rental property will be 50% of the monthly rent. So, if the monthly rent collected on a property will be $1,200, the estimated expenses would be $600 a month.

To ensure that you generate cash flow, though, it’s important to estimate each individual expense and not rely on a universal estimate.

Conclusion

Flips can generate cash flow, but along with the short-term profits come headaches that could be avoided by focusing on longer-term investments.

Investing in rental properties is primarily about monthly cash flow rather than appreciation. As properties throw off cash after all expenses are paid, the investor’s equity position increases and the property can be leveraged to purchase additional investments.

Graystone Investment Group

Graystone Investment Group is a real estate wholesaler. We have researched the Tampa Bay area neighborhood-by-neighborhood to determine where investments are likely to have the most most return on capital.

Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.

If you are interested in learning more about highly profitable investment properties in the greater Tampa Bay area, please fill out our Investor Profile or contact us direct.

Tweet
PinIt

Filed Under: Articles, Cash Flow Tagged With: Cash Flow

headshot of Jorge VazquezLearn More About Real Estate Investing

The Graystone Newsletter will keep you informed with important information relating to real estate investing. The newsletter includes information we share with our clients about the best places to invest in real estate, the latest trends, and the information you need to know to succeed investing in real estate.

Real estate investors, wholesalers, flippers, real estate agents, and everyone connected to the real estate industry will benefit from the wealth of information we share very month.

For more information about how we process your data, please click here to read our Privacy Policy.

Disclaimer:
RENTAL4INCOME.COM IS A WEBSITE OF GRAYSTONE INVESTMENT GROUP LLC. YOU ARE HEREBY NOTIFIED THAT NEITHER GRAYSTONE INVESTMENT GROUP LLC, NOR ANY OF ITS EMPLOYEES OR SUBSIDIARIES, REPRESENT YOU IN ANY CAPACITY. YOU SHOULD NOT ASSUME THAT GRAYSTONE INVESTMENT GROUP LLC OR ANY OF ITS EMPLOYEES OR SUBSIDIARIES IS A REAL ESTATE BROKERAGE. WE ARE A WHOLESALER, AND ALWAYS ACT AS A SELLER OR ASSIGNOR ON EVERY TRANSACTION.

Want To Learn More About Real Estate Investing?

Sign up for our newsletter, and you'll receive our newest articles!

By clicking this button, you consent to receive emails, calls, and text messages about our products and services at the email address and phone number you provided. You agree that such calls may be made using an automatic telephone dialing system, they may be considered telemarketing or advertising under applicable law, and that you are not required to provide your consent to these calls to make a purchase from us. For more information about how we process your data, please click here to read our Privacy Policy.

Recent Articles

  • How to Get Started in Real Estate Investing
  • What to Expect at Closing
  • How Much House Can I Afford?
  • How Do Interest Rates Affect the Housing Market?
  • What Does a Realtor Do for the Homebuyer?

Get Started Right Now!

Get started investing in real estate with Graystone Investment Group.

For more information about how we process your data, please click here to read our Privacy Policy.

phone Graystone Investment GroupCall (813) 449-4323
Text Graystone Investment GroupSend Text to (813) 600-1658
Graystone Investment Group
3001 N Rocky Point Dr E, Suite 200
Tampa, FL 33607 USA
phone Graystone Investment GroupCall (813) 449-4323
Subsidiary Brands:
Graystone Acquisitions
Graystone Real Estate
Homes4Income.com
Rental4Income.com
RealEstate4Investing.com
Accessibility
Terms of Service
Privacy Policy

Recents Posts

  • How to Get Started in Real Estate Investing
  • What to Expect at Closing
  • How Much House Can I Afford?
  • How Do Interest Rates Affect the Housing Market?
  • What Does a Realtor Do for the Homebuyer?
  • What Does a Realtor Do for the Home Seller?

Categories

  • Articles
  • Cash Flow
  • Finance
  • Investment Tips
  • Market Reports
  • Real Estate Investing
  • Real Estate Market Stats
  • Real Estate Mentor
  • Recent Properties
  • Rental Property
  • Special Events
  • Tampa Real Estate News
  • Tampa, FL
  • Testimonials
  • Turnkey Investment Properties
  • Uncategorized
  • Wholesale Real Estate
Client Evaluation | Investor Profile | Rewards Program | Recent Properties | Pre-Approval Form
Legal Notice | Terms of Service | Privacy Policy
© 2023 GRAYSTONE INVESTMENT GROUP, ALL RIGHTS RESERVED. THE RENTAL4Income LOGO AND BRAND IS THE PROPERTY OF GRAYSTONE INVESTMENT GROUP LLC
DISCLAIMER: RENTAL4INCOME.COM IS A WEBSITE OF GRAYSTONE INVESTMENT GROUP LLC. YOU ARE HEREBY NOTIFIED THAT NEITHER GRAYSTONE INVESTMENT GROUP LLC, NOR ANY OF ITS EMPLOYEES OR SUBSIDIARIES, REPRESENT YOU IN ANY CAPACITY. YOU SHOULD NOT ASSUME THAT GRAYSTONE INVESTMENT GROUP LLC OR ANY OF ITS EMPLOYEES OR SUBSIDIARIES IS A REAL ESTATE BROKERAGE. WE ARE A WHOLESALER, AND ALWAYS ACT AS A SELLER OR ASSIGNOR ON EVERY TRANSACTION.
Internet Marketing by Image Building Media.