Appreciation & Cash Flow - Factors you should consider when investing in real estate

When I hear people speak about investing in real estate they often refer to the "market" going up. They might say something like, "This home will be sure to go up in value". What they are referring to there is what I would call growth or appreciation of an asset. While this is an important part of where a portion of the value of an investment comes from it is one of the most worrisome components for me. The reason being is that it brings an element of speculation into the equation of investing that I would prefer to avoid. It's not that when I consider an investment I don't include the potential for it appreciating into my calculations. It's just that we don't want to rely on that appreciate for our return. There are too many factors that could contribute to that number going up or down. For example. Consumer confidence. Economic factors such as mega projects or other developments. Rises or falls in interest rates ect. We want to make educated decisions to maximize the potential for return.

That's what leads me to cash flow as my primary determining factor when considering a real estate investment.

I'm Jerry Boyles, a Realtor with Coldwell Banker. Thanks for watching. Please feel free to email me with any questions at [email protected] or contact me directly (709) 693-0588.

You can also find me on Facebook at www.AskTheRealEstateProfessional.ca.