Home Investing
When it comes to investing, particularly in real estate, there are two big schools of thought: investing for capital gains, and investing for cash flow. Purchasing a home and watching it appreciate in value is an example of investing for capital gains. Purchasing a home then renting it to tenants is an avenue for cash flow.
Robert Kiyosaki, best-selling author of “Rich Dad Poor Dad,” and writer of Yahoo! Finance’s “Why the Rich Get Richer” column, recently wrote about these two investment styles. He always advises readers first and foremost to educate themselves on investing, and to always prepare for the worst when it comes to managing your money. Then, in this article, he prefaces: “the following are the steps I did to prepare for the worst. I do not recommend my path; I will simply state why I did what I did and what benefits were gained.”
He then explains that for himself, he invests for cash flow. When the real estate market hit trouble, he explains, most people had invested for capital gain and either “lost a lot of money or are afraid of losing more money.” Investing for cash flow has kept money coming in for him, even through hard times. “Even though the real estate market crashed in 2007, my rental properties continue to produce cash flow.”
1915 Cullen
Further, when the market turns down, these options become cheaper. “The good news is, when prices crash, cash flow investments become more affordable.” Now is a great time for investors, even new ones, to add these real estate investments.
1915 Cullen, for instance, is an Austin duplex with two units that rent for $1,790 a month together. Currently for sale at $269,000, this charming Crestview home, pictured, is a great investment.
Tags: Austin, capital gains, cash flow, home investing, income, investment properties, investment property, Texas
This entry was posted on Thursday, October 8th, 2009 at 9:11 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
October 8th, 2009 at 9:30 am
Angie Francis says:Thanks, Dave. I couldn’t agree more. My husband is an investor and although he is not buying to fix and flip right now he is certainly happy to have his rental properties. It is a great time to pick up some more… if you have the money and the financing!