In real estate, cash-flow investments pertain to properties that generate regular income, such as hotels or leased buildings. There is a steady stream of yields, thus the term cash flow.
An example of this in the traditional context involves the “condo-hotel”, an apartment building that is projected to function as a hotel. Here, investors buy entire units in the building, and then pool their units into a property-management system that works like a hotel administrator. Profits are then divided to the unit owners, usually at the end of a fiscal period, even if particular units have not been occupied at all.
Needless to say, traditional cash-flow investments are for high rollers who make up small, exclusive sets of investors.
In real estate crowdfunding, investors can stake their individual claims on properties, without necessarily owning entire units, and consistently earn therefrom.
An example would be investing in a resort hotel that seeks to be renovated, refurbished, and repackaged in view of targeting a wider base of patrons. Crowdfunders are enjoined to participate in raising the capital needed, not by buying particular rooms but by placing amounts of money that they are comfortable to invest. When the hotel is operational and profits are coming in, the yields are distributed to the crowdfunders on a regular basis.
Cash-flow investments in the HBR portfolio involve project operators who foresee the influx of consumers tied to the accelerated growth of the UAE economy. Property assets range from single-unit and multi-unit residential buildings (including villas and luxury condominium units), office spaces and commercial buildings, economic-zone locators and industrial parks, recreational facilities that are in line with the tourism boom, and other viable structural landmarks.