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CHAPTER 6

RENTAL INCOME

Cash Flow Essentials

Many forms of real estate analysis are aimed at a study of the overall market and the supply and demand factors in specific cities and towns. This is a starting point in the decision to invest in real estate, whether for speculative purposes or as part of a long-term strategy. However, when investors make their decisions to buy and hold, they also need to be able to analyze the health of a property’s cash flow, the demand for rentals, and market rent rates. The trends in these areas—as is true of all cyclical investing—do not remain the same forever.

THE BASIC CASH FLOW EQUATION

Cash flow is the key ...

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