CrowdfundUP offers investors a wide variety of projects to participate in. In this blog we look specifically at cashflow investing with Real Estate.
Broadly speaking, investments can take two forms: those intended to generate predominately capital gains over the life of the project, and those intended to produce income over the life of the project. Many projects will offer a combination of both but will usually be oriented towards one or the other.
"Cashflow investing" refers to investing in those projects which are intended to produce cashflows over the life of the project: either in the form of interest payments, or dividends.
The most common form of managing risk is through diversification. One way of diversifying investments is to hold a mix of income and capital-oriented investments.
Real Estate cashflow investments may take one of two different forms:
Ultimately, income investing is about risk and reward: the greater the risk the greater the potential income, and vice versa. For investors, this means understanding the risks of a cashflow investment, and determining whether the income is appropriate for the level of risk.
You should therefore, do your "due diligence" before making an investment. So for cashflow oriented projects consider the following:
Cashflow investments can play an important part in your investment strategy. The combination of capital stability and a regular income stream may be used to offset other more risky capital growth-oriented investments, or alternatively are attractive investments in their own right.
The information in this article is general in nature. Any advice it contains is general advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person.
The article content is not intended to be a substitute for professional advice and readers are urged to seek their own appropriate advice before making decisions.
Any reference to a particular investment is not a recommendation to buy, sell or hold the investment.