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How To Build A Portfolio For Real Estate For Cash Flow

Most of the millionaires around the world made their millions through owning a real estate. If you combine other industries, real estate cash flow still surpasses it all. There is money to be made in real estate flipping house and wholesaling, but that is short term. The real money is in investing in long term real estate rentals.

Over time, you will be able to grow a real estate portfolio which might just come in handy during your retirement for your lifestyle through the cash flow. With several rental properties that are generating cash flow, which is positive, you will comfortably fund your retirement in style and there will be no need to worry about the many economic factors which threaten other investors in bonds and stocks.

If you are young, you have an opportunity to go for payment in installments to  invest in your rental property for the first time  and start building your individual portfolio for real estate after several years until  your retirement. In case you are in the 5 to 10-year bracket to your retirement, you have an opportunity to convert your assets in investments that are yielding low into real estate rentals thereby increasing your monthly income in retirement. Even if you are past your retirement age, you can still do the same.

Residential rental property investments

Before you start thinking, the below factors must be right before you invest in a property for rental, which is a rare thing to happen. Your goal needs to be for you to try and maximize the factors the best you can and you might find out that, there are some which are more important than others.

The factors include:

  • Location: A real estate is all about where it is located. There is nobody who wants to rent a house in the middle of parking space for a supermarket. But if you get one that is close to a green belt or a children’s park, that could be ideal.
  • Rentability: Even if the location is great, but the competition in the market is high, it might not be the right place for you to invest. When there are a lot of rental houses and owners are giving out incentives, it might not be the right place for you to enter into the market in that particular area. When there are a few rental houses, you are sure of keeping the property occupied and asking for high rents.
  • Expenses: Property taxes are a major expense but there are some areas that happen to demand for higher rates due to the amenities which are offered, this makes the taxes to be high. If you are in a position to offset the expenses with the cash flow that comes in on a monthly basis, then it is a good investment.
  • Appreciation: Though the primary consideration when looking out for a real estate investment is the cash flow, it is also important to consider the appreciation value of the property in question. There are two ways in which to have your equity built when it comes to rental properties: paying down the mortgage and appreciation in value.


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