Have a Positive Cash Flow There are two kinds of positive cashflows: pre-tax and after-tax. A pre-tax positive cash flowoccurs when income received is greater than expenses incurred.This sort of situation is difficult to find, but they areusually a strong and safe investment. An after-tax positive cashflow may have expenses that outweigh collected income, butvarious tax breaks allow for a positive cash flow. This is morecommon, but it is generally not as strong or safe as a pre-taxpositive cash flow. Regardless of what kind of real estate youchoose to invest in, timely collections from your tenants isabsolutely necessary. A positive cash flow -- whether it bepre-tax or after-tax -- requires rental income. Be sure to findquality tenants; a thorough credit and employment check isprobably a good idea. Use Leverage One of the most importantfactors in determining a solid investment is the amount ofequity you are purchasing. Equity is the difference between theactual worth of the property and the balanced owed on themortgage. Benefit from Growing Equity While investing in realestate is relatively complex, it is often worth the extra work.When compared to other financial investments, like bonds orCD's, the return on investment for real estate purchases canoften be greater. The key to real estate investing is equity.Determine an amount of equity that you want to achieve. When youreach your goal, it's time to sell or refinance. Determining theproper amount of equity may require the assistance of a realestate professional.

About the author:Neda Dabestani-Ryba is a licensed Realtor in Maryland. She is amember of the President's Circle of Top Real EstateProfessionals. She can be reached at (800) 536-3806 or visit herwebsite for more information:http://neda.dabestani.pcragent.com/ Prudential CarruthersREALTORS is an independently owned and operated member ofPrudential Real Estate Affiliates, Inc., a Prudential Financialcompany. Equal Housing Opportunity