Not exact matches
There are several different ways to make money on residential real estate — amortization (tenant paying down the mortgage, which increases your equity in the property
over time), depreciation / other tax benefits,
appreciation, and
cash flow / income.
Quality of financial position plus quantity of resources, incidentally, translates into long - term earning power, whether that earning power evidences itself as unrealized and, therefore, unaccountable for
appreciation of undeveloped land (St. Joe Paper); growing
cash flows (Forest City Enterprises); enhanced attractiveness as a takeover candidate (Constellation Bancorp or DCA); or rapid increases
over long periods in earnings per share as reported for GAAP purposes (SunAmerica).
You'll also be able to see your estimated internal rate of return as a percentage
over a five - year period, as well as estimated
appreciation,
cash flow, cap rate and total gain.
In the values above, the program has calculated the «profits» of the investment
over the three main sources of value rental property investor receive (
cash flow, principle repayment, and property
appreciation).
We've invested in rental properties for well
over a decade now and the
cash flow and
appreciation has been excellent for us too!
Once you include
cash flow, mortgage paydown and
appreciation rate, I bet your ROI is
over 30 %.
I have been investing mainly for
appreciation and not
cash flow over the past few years.
I like
cash flow because when it increases then I increase my monthly payment on the loan, which decreases the amount of interest I'll pay
over the life of the loan, and of course shortens the loan, which all increase my equity regardless of
appreciation.
I looked at the National FRED database, and was able to confirm my thoughts: housing prices in some of the high
cash flow markets BP members have highlighted in the south east (Atlanta, Knoxville, Baltimore, Raleigh) generated average
appreciation of 3 % or less
over the last 30 years.
My expensive homes earn lower annual returns based solely on current
cash flow, but when I figure in underlying
appreciation and ease of management its not even close, the expensive home clearly prevail
over time.
Initial
cash flow might be less but
appreciation and rent growth
over time usually is better.
Im in an
over priced, high
appreciation, low
cash flow market where everyone is climbing
over each other to buy investment grade starter homes, and cap rates are in the 4's for anything decent in the commercial / MF space... I buy for
appreciation primarily but always look to optimize
cash flow.
I believe Denver will produce great returns with the
cash flow and
appreciation return than a pure
cash flow market will
over the long run.
Or, if you buy a house for
appreciation and
cash flow, you can ride through the market ups and downs without stress because you know your property value is bound to increase
over time, and your expenses are covered by your rental income.
The goals were shifting and I was now looking at
cash flow and
appreciation on my rentals
over 18 - 20 years.
I think anything
over $ 100 positive
cash flow is a good deal, especially if the property is located in a romantic location with lots of
appreciation... You're benefiting from owning and controlling that asset, while your tenant is making the payment!