Money, The 4 kinds when investing in London Ontario Income Properties
Most investors in real estate and in fact, most business owners think of money in an abstract way and do not truly understand the brutal truth or refuse to acknowledge what money really is.
Briefly, money can be broken down into 4 parts, being
You can have all the profit you want but without flow (cash flow) you cannot pay your suppliers (that is income out), your service providers, employees or your investors or lenders. Without flow, you erode your equity because you must borrow to keep afloat, if you are late in paying your monthly commitments, it erodes your profit and equity because of late fees, interest charges (income again) and or finding another supplier or support person or employee.
I have seen many real estate investors with properties that have increased in value (equity) but they themselves are digging into their pockets to stay afloat and they think they are doing well!
I have seen many real estate investors who have great tenant incomes but forget about flow, profit and equity.
In turn, I have seen landlords with decent income (money in, money out) but have poor cash flow because of little profit!
Some guru’s say profit is perspective but I say unless you take all the 4 rules of money, apply them to the property you are thinking of buying or selling, you are not getting the true value of what money is.
I know, I know, I hear this all the time, my property increased 12% last year, or, “I never have vacancies”, or “My mortgage payments are low” and on and on.
This ezine is not the place to go into detail about the 4 rules of money, so I hope I have changed your perspective about money, I know my clients have and their financial health has improved considerably and in turn their future money worries have subsided and in some cases, vanished!
When you are ready to strategically invest in real estate, who are you going to call?