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In an uncertain market, the only really smart real estate investment is cash flow. Cash flow is not the amount of rent that comes in. It’s the amount that is left after all the expenses and mortgages have been paid. This needs to be a positive, not a negative number!

Two years ago it was virtually impossible to achieve this in Las Vegas real estate. Home prices were so high that it was common knowledge among investors that you had to be prepared to “carry the negative cash flow” - which means make up the difference every month out of your own pocket! (Aaaaargh!!!) This is no longer the case.

Markets go up and markets go down. When the market goes up, rents go up; when the market goes down, rents stay the same. If you buy investment properties in such a way that the rents cover the payments from Day One, you’ll never run into trouble because, over time, the rents will go up, but the mortgage payments won’t. (Even with an adjustable rate mortgage, rental income can still cover the payments, if you buy it right.) So, even a small positive cash flow to start with can develop into a very healthy stream of passive income a few years down the road.

To recap, now that you can buy a cheap home in Las Vegas at such a great price that the rental income will more than cover the mortgage payment, there’s no good reason to wait before buying! Even if the value of the property went down, the rent would stay the same, and the tenants will be paying off your mortgage for you.

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