When an investor seeks properties primarily for cash flow, this is a sign of?

The correct understanding centers on the approach an investor takes when seeking properties for cash flow. Seeking properties predominantly for cash flow generally indicates a focus on steady income generation over time, which aligns well with long-term investment strategies.

This approach often involves identifying properties that can produce consistent rental income, ensuring that the investor benefits financially through monthly cash flow rather than relying on short-term capital gains or market appreciation. In this context, cash flow is a key indicator that the investor is interested in a sustainable revenue stream rather than speculative gains that may arise from property value appreciation in a fluctuating market.

While passive income investments do relate to cash flow, it specifically reflects how the income is generated, suggesting a hands-off ownership model rather than the motivations behind acquiring the properties. Active management refers to a more hands-on approach in overseeing the investment, which may not necessarily focus on cash flow as the primary goal.

Thus, the emphasis on cash flow primarily signals a long-term investment strategy, with a focus on sustained financial returns over time, rather than a speculative approach, which would imply a focus on short-term profits from market fluctuations.