Out of the hundreds of people I’ve worked with over the years, a little over a hundred have investment real estate that they collect rental income from. While investment real estate can be a tool for providing cash flow, it is not the only way to achieve this goal. This is a discussion some of the risks associated with investment real estate and some alternative ways to generate a passive income.
Investment Property As An Income-Producer
When purchasing an investment property, many investors have a goal of increasing their total cash flow. To determine if a property is a good investment, they look to return on investment in rental income from their investment. The way of calculating this, most simply, is taking your rental income, subtracting your costs, and dividing by your home price. Some material cost considerations include property taxes, insurance costs, maintenance expenses, and mortgage interest.
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