Investing in real estate can provide several benefits, including cash flow from rental income, property appreciation over time, and tax advantages. For example, if you buy a rental property for $200,000 and rent it out for $1,500 per month, you would generate $18,000 in rental income per year. After deducting expenses like property management fees, maintenance, and property taxes (let's say $6,000), your net cash flow would be $12,000 annually. Additionally, if the property appreciates 3% per year, it could be worth $206,000 after one year. This means you’re gaining both cash flow and equity growth.

Cash flow refers to the net amount of cash being transferred into and out of an investment. In real estate, this typically means the income generated from renting out the property minus any expenses associated with owning and managing that property. Positive cash flow indicates that you are making money, while negative cash flow means you are spending more than you are earning from the investment.