KLE 98: Real Cashflow, Fake Cashflow – Part I
I think, by now, you no longer subscribe to the “buy property for the tax deductions and future appreciation” scams of the 90′s and 2,000′s that resulted in one of the biggest property busts that the world has ever seen.
But, I fear a new mantra – not quite as dangerous, but one that can equally squash your future returns (hence, financial dreams) … it’s the ‘positive cashflow’ mantra.
You are unlikely to read this anywhere else, but there are three types of positive cashflow Real Estate (i.e. real-estate that puts more money into your pocket than it takes out):
1. Tax Cashflow
2. Fake Cashflow
3. Real Cashflow
… only one of which you will really be looking for, although, any great property purchase will probably exhibit characteristics of all three.
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There’s a word for that: gambling. Let others gamble on this kind of real-estate; you should simply avoid it.
In the next installment in this special 4-part KLE on real-estate, I will cover the first kind of ‘positive cashflow’ real-estate: Tax Cashflow.
