6 Strategies for Increasing the Cash Flow of Your Real Estate Investment

A positive cash flow will allow you to accumulate liquidity in order to continue investing

Earning money from your real estate properties requires a strategic vision to enable you to optimize your investments. Tinnakorn jorruang/Shutterstock

By Xavier Preterit

In real estate investment, cash flow corresponds to the amount of money you have left over after deducting all the expenses from your income each month. In concrete terms, these different expenses include the monthly payments, the taxes, the insurance costs, the management fees, and all the other charges related to your property. The income is mainly made up of rent and rebilled charges. Depending on the case, the cash flow can be negative, zero, or positive.

When you are aiming to generate money from your real estate investments beyond the assets that you accumulate, you should aim for a positive cash flow. A positive cash flow will allow you to accumulate liquidity in order to continue investing. Earning money from your real estate properties goes beyond acquisition, but it requires a strategic vision to enable you to optimize your investments. To achieve this, there are several techniques you can use.

1. Buying at a Low Price

The price of the property is an important variable for determining the profitability of your project. The lower the price, the less you will pay in credit. It is, therefore, important to negotiate the price of your property as soon as you buy it. Always keep in mind that you earn money at the time of purchase but not when you resell your property. Many investors tell themselves that in 10 years, the property they have acquired will be worth this or that amount, and they do not think about negotiating its price.