Passive Real Estate Investing Question
For those of you who invest in real estate as a passive income, specifically 1-4 family what kind of cash flow do you look for? After mortgage, taxes, insurance maintenance etc at the end of the year what would be an acceptable cash flow. Currently looking at an investment property in a market that will have some good appreciation over time. The cash flow at year end is about $ 1,200 but that is after the generous assumptions on expenses/maintenance, and insurance. I know in the long run after being paid off it will cash flow more like 40k but wondering if at this point making 1,200 a year isn’t worth it. Thanks in advance.
Best thing to do is calculate your CoC and IRR at a variety of scenarios to see if it fits the returns profile you're looking for. There's a big gap between $1,200 and $40k and a lot can happen between those two scenarios.
Just take your "generous assumptions" (which at 1200 annual cash flow I assume to be very conservative) and scale them back slightly to see how the numbers change based on lower maintenance, turn costs, etc and that way as you run the property you can compare actuals to your various scenarios and see how it performed
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