CASH FLOW OR APPRECIATION?

It’s extremely hard to find both – so you are going to have to choose between one or the other. What are your goals? Do you need income from your rental properties on a regular basis? Or maybe you don’t need the regular income and you’re alright waiting for the larger payoff when you sell the property years down the road. Either way, you need to know what you want going in.

For example, here in Austin, it’s hard to find a cash flow positive single-family properties in central Austin. Homes are just too expensive. When you take a loan out on the property, the numbers just won’t work. Rents are not high enough. You’ll end up in the red each month. Now, those same homes appreciate at a nice clip – 7-10% per year, so if you can wait it out, there will be a good payoff at the end. Not to mention the tax breaks. This is a good strategy and one I use quite often.

If you want cash flow, you’ll need to either consider properties further out (i.e., the burbs) or consider multi-family type properties. The burbs won’t appreciate at the same rate as central Austin homes, but you’ll get monthly cash flow. Multi-family properties also appreciate at a much slower rate, and are more expensive, but will cash flow at a much better rate than single-family homes.

So, what are your goals? I have no doubt there is an investment strategy that fits you.

Want to learn more about investment properties? Reach out to me, we’ll grab coffee and chat.