What you need to know about CASH FLOW

Today’s real estate investing word is cash flow.

Cash flow is how much money is coming into your pocket after you pay all the bills which includes insurance, rent, water, electricity, whatever bills you’re paying for that property.

It’s after what comes in minus any expenses. What is the cash flow for that property would include rents and income minus any liabilities.

This is not just the profit, but how much money is actually coming into your pocket every month.

If you have a Buy and Hold, or rental,  every month there are bills that must be paid.  After you pay those bills, how much money are you able to put into your budget.

TIP: Make sure you are accounting for long-term maintenance.  I suggest holding back at least two months income for a property or the amount it would take to replace a major item like Air Conditioner or Hot Water Heater.  You can also make this amount equal to the deductible of your insurance policy.

Make sure you go to DFWTOP.com/words if you want to download 22 Real Estate Investing Terms you need to know. It’ll help you as a new real estate investor sound like a pro.