KLE 99: Real Cashflow, Fake Cashflow – Part II
In the last KLE I told you that there are three types of positive cashflow Real Estate:
1. Tax Cashflow
2. Fake Cashflow
3. Real Cashflow
Today, I want to discuss the first of these … cleverly designed to make Negatively Geared real-estate look like a good deal!
Tax Cashflow
In the first installment, I explained that most real-estate (especially residential real-estate, and single family homes and condos in particular) has more costs (e.g. mortgage interest, vacancies, repairs & maintenance, provisions, etc.) than income (i.e. rents), forcing the average investor to gamble on the future appreciation of the property.
So, those developers and promoters with lots of real-estate that costs way too much to buy found some money to help you cover your losses and turn them into a ‘profit’ … from this, comes your first opportunity for the Holy Grail of Real Estate: Positive Cashflow property i.e. one that puts money INTO your pocket each year.
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In the next installment, we’ll look at something even more interesting: Fake Cashflow.
