Can you replace your salary, with passive income through real estate investing? You might think this sounds fantasy, but it’s actually quite attainable. All you have to do is follow a simple formula, and you’ll be earning a passive income in no time. You’ll have to put your money to work for you. Let’s first implement an actionable plan based on tangible numbers to start creating cash flow and passive income.
So, if you’re trying to replace $60,000 a year, here’s how rental real estate can help you get there:
$60,000 salary/12 months = $5,000/monthly income
So, if I rent out each unit for $1,000 monthly that would be just 5 units. However, when I do my personal calculations, I like to be conservative with my numbers. In my rental income, I need to account for any potential vacancies, repairs, mortgage payment, or expenses. I do not want to be short at the end of the month. I need to account for every expense. So, let’s work this into the formula.
After paying all my bills on my rentals, I have a positive cash flow of $395 per month per unit. $395 cash flow per month X 12 = $4,740 per property, per year. $60,000 / $4,740 = 13 rental properties.
In order to completely replace a $60,000 salary, all you have to do is acquire 13 rental properties. That’s a totally attainable goal, and we’d love to show you how.