01/14/2024
Planning to dive into real estate investment this year? Hold on tight, and ensure your success by calculating your NET cash flow with these crucial considerations:
1οΈβ£ Property Management π
- Want passive income, not another job? Consider professional property management.
- Allocate 8-10% of rent for expert management, making real estate ownership more hands-free.
2οΈβ£ Vacancy Reserves π°
- Be prepared for vacancies, turnover, and leasing downtime.
- Set aside 5-8% of rent to cover mortgage during vacant months, ensuring financial stability.
3οΈβ£ Cap-Ex Reserves π οΈ
- Plan for the inevitable replacements of big-ticket items (water heaters, furnaces, etc.).
- Maintain a separate account for Cap-Ex reserves, ensuring funds are ready when needed.
4οΈβ£ Repairs Reserves π§
- Tenant wear and tear is inevitable; budget for repairs.
- Save 5-8% of rent in a dedicated account to cover unexpected expenses throughout the year.
Remember to include ALL these factors when analyzing a deal for a comprehensive financial outlook! π΅β