Real estate and real estate investments can be so alluring but daunting at the same time. Each week we will break down some of the basic to give you a better understanding of the real estate world. These will simply scratch the surface but will give you a fundamental understanding of some key aspects of the complexities within real estate. This week we will look at the standard goals that one aspires to reach with real estate and we will look at basic ways to make money with those investments.
Some fundamental goals in real estate are:
– To buy properties,
– To keep up with payments to avoid bankruptcy, and
– To generate cash flow
Obviously, there can be significantly more and more detailed goals but those are just some of the basic.
This week, we’ll take a closer look at cash flow and ways to make money: appreciation and cash flow.
Appreciation has to do with the increase in the value of an asset over time. The value can be affected either by supply and demand or a change in inflation or in interest rates. While there are some assets that depreciate over time, real estate assets are purchased with the expectation that their assets will move in an upward motion.
Another way to make money with your real estate investment is cash flow income. A way to think of cash flow income is to see it a regular income that comes from the properties or investment. A common cash flow income is rent.