Perhaps I was not clear. My goal is to acquire multiple properties to earn that amount of passive income in the next decade.
I would be starting with 1 property at a target price point between 50-80k. I would try (after all expenses) to profit $200 monthly.
I’ll share my thought process here, and if I am way off or my assumptions are wrong, please chime in.
A purchase price of 80,000 with 20% down at 4.5% that rents for $1150. (This is realistic based on some of the properties I have seen)
Principle, Interest and Taxes 484.00. Accounting for 10% vacancy ($115), 25% banked for capital expenditures ($287), 9% property management ($100), I am looking at $164 net. I can get that to $200 if I put a little more down.
The thought is that I would then rinse and repeat this approach. Throughout the next decade, I will certainly learn to recognize better deals, perhaps a flip or purchasing larger units, negotiating lower property management expenses, etc.
Deferred maintenance is a valid point, and that is what I classified as capital expenditures above.
Appreciate your insight – let me know what you think.
