01
Apr
2010
What will it be then? Capital gains or cash flow?

When purchasing a repossessed property you should already know whether it’s to be for “Capital Gains” or “Cash Flow”. Before looking to purchase repossessed property, visualize a clear goal of your perfect investment strategy which is easily classified as either capital gains or cash flow. Lastly, are you’re buying without intending for it to be an investment simply, or to satisfy the need for you to own your own property? Repossessed property is a bargain why not make it as profitable as possible?

All of this may seem a bit confusing so let us discuss what it all means. When looking at buying a repossessed property for capital gains, it simply refers to the potential profit you stand to make should you decide to sell or liquidate your property. In other words, after selling your house and covering the outstanding balance owed to the bank, you are left with the remaining money which becomes your profit or capital gain. Countless investors buy property to sell property, so simply put, while one loan is applied for another is being paid off. Many investors scoop up the best bargain at auctions and wind up selling them at well planned profits. Some buy when the property market experiences a waning with the purpose of calling it a temporary home in order to sell it once the market starts to find its feet again. This method is tough and your knowledge regarding the area as well as the selling value of your acquired property placed beside your planned market value must be solid and fool proof to the last detail. Touching up your newly purchased property with refurbishments and a bit of remodelling is bound to add to the inclusive value of its selling price.

Cash flow however, often refers to the purchase of a property with the single intention of renting it out in order to generate a continuous flow of income. Using this income you are then able to pay off any monthly expenses including the loan on your property. If you play your cards right and manage your decisions with deadly accuracy, you may be assured of having money generated from the rent of your tenants flow straight from their bank accounts directly into your pocket. Any ‘left overs’, regarding you managed your property wisely will inevitably become your monthly net income or cash flow.

If you are hoping to get the best value for money, we could come to an agreement that sticking to the cash flow option may very well be most rewarding. Investors hoping to buy a repossessed property in order to sell it for a profit wind up with loans and bonds that take years to pay off, not even taking into account the increases on monthly instalments which you plant in a hole with the foolish hope of making it more than its worth. Repossessed properties and a constant cash flow, who could ask for more.

Compare x Properties ×