Cash Flow is a Bonus?
"No Tyler, appreciation is a bonus when investing in real estate".
I get this all the time, and that's because most investors, especially beginners, all want to invest for cash flow...
To make money now.
To put money in there pocket NOW!
And if the property doesn't cash flow, or doesn't cash flow enough, they don't invest.
I was as the 1st Annual WinCity Ontario Real Estate Conference (OREC) this past Saturday, March 16th in Windsor, ON, and this one NON-investor, was telling me I should start investing in student rentals, because they make a ton of a cash flow.
Which is true, if done right!
However, with student rentals, comes a lot more work, more turnover, more headaches and hassles, since there are more people under one; a much smaller roof, since most student rentals in my city are just homes with the rooms individually rented.
Anyways, he kept asking me, imagine what you could do with all that extra cash flow if you were investing in a student rental, and what you could do with it.
And sure, I could imagine it, however these are not the types of properties I invest in when investing in real estate...
I like to invest on Autopilot, hands off, with zero headaches, and student rentals are usually anything but.
So, I won't be investing in student rentals, even if the cash flow is amazing!
Which brings me to the point of this article, would I really put that much cash flow in my pocket each month investing in student rentals?
He was saying that this other investor that was at the conference who invests in student rentals makes almost a $1,000 a month cash flow.
$12K a year!!!
In my mind, as he's telling me this though, and if you've read my other articles about the hidden costs when investing in real estate, from vacancies, and repair and maintenance, you know that the $12K in cash flow disappears quickly.
So sure, maybe when reality strikes, its only $6K a year in the pocket from cash flow....
However, I'm sure some years it might even be 0!
And that's fine!