Income/Revenue Generating Real Estate
Purchasing an income generating property?
Commercial or residential, an income generating real estate is always an excellent source of passive cash flow. As a fact, when purchasing, cash flow is not the only income that should be considered.
An income generating property has three sources of revenues which should be considered at the time of purchasing.
Sources of Revenues:
– Capital earned
– Cash flow income
– Appreciation value
Whether a residential rental property or a commercial office space, they will all have these three sources of revenues. However, simply estimating these revenues are not enough to invest.
Drafting a profitable business plan, knowing the true capitalization rate (Cap rate) and preparing also a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) report are equally important.
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