Switching Gears: Selling Up to Generate More Cash-Flow
Attribution: Flickr user jurvetson
Ever since I purchased my first rental property I’ve been mentally conflicted about the best way to grow my rental portfolio while making money (cash-flow positive) and creating equity. In my experience positive cash-flow investments seem to be mutually exclusive of potential for great equity gains, especially in the short term. The investment opportunities I’ve come across that are revenue positive without the requirement of a large down-payment tend to be in ‘rough’ neighborhoods where the purchase price is low enough to generate great returns on your rent. Conversely, up and coming neighborhoods tend to yield much higher purchase prices and rents need to be in line to compensate. When I run the numbers, they just don’t seem to make the grade.
The trouble with the hood (as I like to call it) is that the investment is great on paper, but in reality it’s much more work. Read more…
