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Rental-Property Profits, 2nd Edition by Michael C. Thomsett

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3.

CASH FLOW: THE ESSENCE OF RENTAL REAL ESTATE

For a landlord, the need for positive cash flow—to have more money coming in than going out—is in many ways more important than month-to-month profit. As a rule, real estate investors do not mind a paper loss for tax purposes. In fact, the perfect situation is one in which you achieve positive cash flow and report a net tax loss. Is this possible? Yes, and in fact, it is the most likely scenario if you plan properly.

Ideally, positive cash flow should be generated from the properties themselves. This means that you do not need to invest more and more cash each year just to maintain your real estate ...

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