» Wanna Be Investors Ask “What is Cash Flow?” » Posted by Realestator      

If you were to search for the phrase “What is Cash Flow” on the internet, you would notice a staggering 4,010,000 search results returned.  It stands to reason that a lot of investors, whether they are buying real estate, a business, or some other asset, do not understand what it is.

One can also infer that if people don’t know what it is, then they probably don’t know how to perform a Cash Flow Calculation.  If you are going to be investing in real estate, for example, then knowing how to do this will mean great success.  Not knowing will bring you many sleepless nights and potential financial ruin.

Real Estate Cash Flow is quite a simple formula, actually.

+ All Income

- Subtract All Expenses

= Cash Flow

What constitutes income and expenses varies from one investment type to another, but here are some common examples for real estate:

Income:  Rents, parking fees, coin laundry

Expenses:  taxes, insurance, repairs, maintenance, HOA fees, vacancies, property managers

If for any reason you still don’t know What Cash Flow is and need help calculating it, then there are many Cash Flow Calculators or Cash Flow Software products available to help you, which can be purchased for an economical price.  Having the tools you need to make smart buying decisions is a small price to pay!

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» Posted in Real Estate Analysis on May 7, 2008.

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