I call it buying an income. If I invest a certain amount of money (say $10,000), what kind of return could I get from that? And in this case I mean monthly cashflow return. Not capital growth. Capital growth is what property is normally for and once you have a few good quality properties, you may decide you need to start building cashflow.
But what kind of cashflow is right for you? Is $1,000 a month for $10,000 invested enough? What if it is $500/m? What about the security of your investment? Or whether it is CPI adjusted? What is the risk associated with this investment? Is it tax effective?
These are some of the questions to ask when looking into an investment opportunity.
**** This is not financial advice, merely a conversation starter and a question I ask myself when looking at an investment. For proper financial advice, please talk to a qualified financial adviser *****
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