A property investor is someone who buys a property and generally holds on to it and rents it out.
This way, if the figures stack up (break even or create positive cash flow), he is getting passive income while hopefully also benefiting from capital appreciation (property going up in price) at the same time.
Many professional Investors consider capital appreciation to be a bonus rather than the goal; they consider positive cash flow from the rent to be the goal.
They don’t rely on capital appreciation, simply because nobody can predict with 100% accuracy what is happening with the property market in the short term.
Therefore it is less easy to predict. Where as before you even buy a property you should have an excellent idea of what it will rent out for.
Long term, the experienced property investor is fairly confident from looking at past history that property will continue to appreciate in value.
But either way, for the professional investor, as long as the rent is covering the mortgage and all other expenses and leaving them with money in their pocket at the end of the month, then they don’t need to worry to much, because they have positive cash flow. When they gain from capital appreciation, as normally happens with property as it goes up in price, they consider this to just a very nice bonus.
One thing to keep in mind is that the property market is not static. It is a changing entity and to be successful long term it would be wise to be able to adjust your strategy from time to time to cater for any changes.
So just because the rent for the property investor provides positive cash flow today, doesn’t necessarily mean that if they bought the same property in five years time that it would cover the mortgage then also.
The most successful property professionals are those that over time learn to be effective as a developer, a trader, an investor or anything else that lends it self well to making money from property.**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.