It is about time that property investors learn once for all that cashfow investing prevails over capital growth investing.
Many novice landlords and property investors have been persuaded by property consultants, agents, finance brokers etc to pursue capital growth investing rather than cashflow investing.
In a raising market, this strategy makes sense but still bears a great risk, as the investor or the landlord must plan his exit strategy to sell before the downturn arrives.
What distinguishes sophisticated investors from the rest is that their investment strategy always focuses on cashflow first, then capital growth. But the novices have been conditioned to do the contrary, they invests primarily for capital growth, and not so much for cash flow.
This is often why the novice will take such a long time, if ever, to achieve the financial freedom that they wanted from property in the first place.
If your investment property (buy to let) is in negative equity or negative cash flow, do not despair! Even during this economic downturn you still can turn things around and achieve positive cashflow. You can convert your assured shorthold tenancy into a lease option (rent-to-buy or rent-to-own).
Following are the steps on how to do it.
Establish why you shouldn’t sale
If you selling your property in the current market means you have you have to find funds to repay your mortgage then do not sale! Try instead to understand how to get more cash from your property by impleting a lease option agreement.
Determin the five key lease that make a lease options agreement
If you choose the lease option road, you have to determine the five key elements previously discussed:
- Your sale price
- The upfront option fee (the down payment that reduces the purchase price)
- The monthly rent
- The instalment option fees (that can also reduces the purchase price)
- The option period
You can learn how to determine these five elements and engineer a win win transaction between you and your tenant-buyer. To find out more visit http://www.assuredpositivecashflow.com
