You can truly create high passive income and high cash flow through investing in apartments. ANd for the same investment you can make so much more than you can over single family homes.
Let’s look at a simple
example:
Imagine if you were to
buy a $250,000 single-family rental house. That $250,000 house may rent for
somewhere in the neighborhood of $1,500 per month. The underlying mortgage on
that house may be somewhere between $1,000 and $1,400 per month. So you may end
up getting between $100 and $500 per month in positive cash flow.
Now, let’s take a look
at a similar investment from a commercial standpoint. That same $250,000
investment may end up getting you a 10-unit apartment complex, which comes out
to $25,000 per unit to acquire the property.
Let’s say each of
those units were two-bedroom apartments, which could rent in most areas of the
United States anywhere between $400 and $600 per month. For simplicity’s sake,
let’s use an average of $500 per month. At $500 per month times ten units,
you’re bringing in $5,000 per month – more than
triple the rent that you could expect to get from that
same $250,000 single-family house. Your underlying mortgage payment would be
very similar to what you would expect on a residential property; for this
example, let’s use $1,400 per month.
Your cash flow on this
10-unit apartment building will be $3,600 PER MONTH ($5,000 per month income,
minus $1,400 mortgage payment). Now that will make a difference
in just about anyone’s life!
In fact, if you wanted
to GIVE AWAY one apartment to an on-site property manager, and maybe pay them a
few hundred dollars a month for part-time help, you’d have your property
working on auto-pilot and you’d STILL be making thousands per month –- true
passive income!
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