Each week in this series of short videos, we discuss the common mistakes we’ve seen investors make.
Today we discuss the choice between investing for Cash Flow vs. Capital Growth.
Which way is right?
Points we discuss:
- Most investors think they need cash flow but residential real estate is a high growth relatively low yield investment
- You can’t save your way to wealth
- Cash flow keeps you in the game, but capital growth gets you out of the rat race
- You need to build a substantial asset base – to give you choices.
- Most of your assets on retirement will be the tax free capital growth of your property portfolio, not the rent you receive or the money you save
- You need to build assets first then transition to the cash flow stage
- While many investors buy properties for cash flow, I buy properties to allow me to buy more properties. You need the capital growth to pay for your next deposit and the rising rents will help pay for your mortgage for your next property purchase