How much has your cashflow increased over time?

[Darrell B.]

I'm curious as to how cashflow has increased from time of owning a property. Let's say after the 5 year mark or 10 year mark. I know rental percentages increase differently for different markets and there's a national average but I'm curious on real stories of how much cashflow has increased after property taxes, insurance, expenses increase as well. Does the actual cashflow increase or is that number only increase on paper? Thanks for your time and stories. 

[Nathan Gesner]

Quote from @Greg M.:

People who look at cashflow look to today. People who focus on wealth creation look to the future. You can increase cash flow by refinancing at a higher interest rate, deferring needed maintenance, and making major CapEx improvements. None of which I would recommend, but it can increase cashflow.

You should be focusing on wealth creation instead of cashflow. A combination of principal reduction, appreciation, and increasing rents. 

As for your actual question, I live in an area of ever increasing rents. Even though rent keeps going up, inflation, taxes, and other expenses eat most of those rent increases. 

I have a relative in his 80's with over $2 million in the stock market. Most people would consider him wealthy, but he can't access his money without paying some serious taxes, so the money just sits there. Last year he drew about $42,000 in dividends, but his stock value also lost over $500,000 in about six months.

Meanwhile, I only started investing in real estate five years ago. I have a net worth equal to his, I earned over $150,000 in cashflow last year, and I get a ton of tax benefits. My net worth continues to increase, my cashflow continues to increase, and there's very little risk that I'll lose 25% value in just six months.

Who's really wealthy?