Three Ways to Get Great Cashflow in Property Investment

People choose to invest in property in order to build a portfolio of cashflow that can be used as a pension or that can replace their current income. This gives them a fall back plan in an economic time that seems pretty uncertain. I personally consider this to be a great idea. Property is unlikely ever to reach a value of zero as it is a required part of daily living - having shelter. If you are buying for investment purposes, then property, in my opinion, cannot be beaten for great return.

Here are three ways to get great cashflow.

• Single residential lets

This is the most common strategy when considering property investment. Investors buy a property at a discounted price and then rent it out to a single family. The rent then covers the mortgage and more, giving them a profit. It is the least time-intensive method. It is also the least lucrative in the short term but, of course, you are in this for the long term, aren't you? If you have bought at the right price, in the long term you will not only have positive cashflow but you will also have capital gains.

To maximize the cash flow in this strategy, ensure the purchase price is appropriate for the rent that can be achieved on the property

• Multi-lets

Split a house into rooms or self contained units (flats) and rent them out on an individual basis. This is a great strategy for cash-flow but may involve slightly more management than the single let option. Of course, you can always leverage the experience of a local letting agent. This will further minimize the time you need to spend on the property.

In this strategy, a yield of 12% and above is usually easily obtained as long as the investor again has been careful about the purchase price and money spent on updating the property.

• Flipping Property or Buy-To-Sell

Another viable cash-flow strategy though most think of it as capital gains. Some investors make a steady income without holding a single property. You can sell to investors, estate agents, owner-occupiers, or put it in an auction. All you need is property at a great price (Hint - there is a lot around!)

These are 3 cash - flow strategies to consider.

In order to further improve your understanding of cashflow and the various methods available to maximise it in property, consider playing the cashflow game designed by Mr Kiyosaki, author of Rich Dad, Poor Dad. It is pretty surprising what playing a game like that can do for you.

Article Source: