I have traveled and looked at a lot of different markets in the United States. The term “cash flow” is used by a lot of experts. The bulk of them think that $200-$400 a month net cash flow is good(residential real estate). I personally believe in 15%-18% returns are needed. Lets look at why $200-$400 is not always good.
I believe that you need at least $450+ net cash flow a month to make great income on properties. The reason I say that is the maintenance and quality of tenants your property attracts. For example if you have a multi plex your turnover in tenants may be higher than a home. I know that is true in my company. Tenants stay an average of 18 month in a home. That means less maintenance and more cash flow. That means you have more cash flow with different types of properties.
I mentioned this before but it’s worth mentioning it again, air conditioning is going to be a big cost if you need a new one. That is why I like the Cleveland area, most properties do not have central air in the home. That means less maintenance.
Cash Flow is not just the difference between your fixed costs and income. Properties vary a lot by what you have to keep up. You need to keep in mind that you will have maintenance and that cost can cost you a lot of cash flow. My system protects my investors from those high cost maintenance issues. We have a large network of people that work for us and give us great pricing.
Another consideration is if your buying one or two properties remember that your cost will be higher in maintenance, because you are not going to have steady work for those maintenance people. Bulk is always cheaper Rooftopinvestment.com has taken care of that for our investors. We have 145 homes and we give our people steady work. I personally watch all the cost put into each property.
Couple examples that I have noticed is we needed a new roof on a clients home. We have a vast menu of roofers and we get 3 quotes. One Roofer came in $1000 less than the other two. That saved my client a lot of cash flow! We also have a HVAC company that gives our investors preferred pricing, and that saves a lot of cash flow for our clients. It was almost 33% off retail prices. That’s saving with bulk! Remember even if our clients only have a few homes they are in our 145 property network!
So when your ready to get into the cash flow game consider what that really means…..Brett Young check out some of our videos at Rooftopvideo.com
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