Real Estate Investing Tip: Halifax Housing Market and the Importance of Cash Flow

Posted on 08. Feb, 2012 by in Uncategorized

Hi everyone

Just a quick investing tip this week all about the importance of cash flow.  Living, working and playing in beautiful Halifax, Nova Scotia you can’t fail to notice that the housing market is hotting up nicely. Halifax is certainly piquing investor interest and it seems that the Fear-of -Missing- Out Syndrome is propelling everyday people to buy up investment real estate in the hope of cashing in at a later date.

Investing in real estate is often thought to be a safe bet but speculative buying can be risky if you don’t know what you are doing.

We are analysing and discarding many properties because they do not meet our strict criteria and do not cash flow, yet very often these same properties are selling very quickly.  As active investors following a solid system, this makes us very anxious. What type of investors buy for negative cash flow? Certainly not sophisticated ones.

A long term real estate strategy and a stable location is a recipe for success.

No matter how good a property, positive cash flow will make your deal much sweeter, rather than hoping (speculating) that your property will go up in value. Appreciation is the icing on the cake and unless your property cash flows from day 1 you really should think long and hard before you sign on the dotted line.

Negative cash flow can make your life as a real estate investor very difficult.

Analyse your deals thoroughly – we use a comprehensive spreadsheet so we don’t “forget” to deduct *all* the monthly outgoings.  You’d be surprised at just how many people do not make accurate calculations.

Know your numbers and always, always buy for cash flow.

Jane

 

 

Tags: , , ,

Leave a Reply