Generating rental property income is not only simple, but it holds the potential to create a source of long term income that can free you from the shackles of your job or the long hours of running a business.
Flipping houses gets a lot of press and may have a ton of reality shows showcasing the quick money involved but by creating multiple streams of rental property income an investor can create a long term source of passive income. This kind of money can support you and your heirs for as long as you own the property.
To begin making rental property income an investor must find property to own. Real estate comes in many forms, with the two biggest categories being residential and commercial. Residential real estate, or single-family homes, is what most people think of when you mention rentals. Yet commercial real estate, which encompasses office buildings, industrial sites, multi-family residential buildings and many others kinds of buildings, is also a great way to create multiple streams of income.
With residential properties you are on hook to on one family or person for your income. If they fail to live up their rental contract you might find yourself without income while you sort of the details. With commercial real estate you are spreading your risk out amongst many tenants, adding stability to your income flow.
Your rental property income is simply the rent you charge. You take that income minus your expenses in the forms of mortgage payments, insurance, maintenance, and vacancy costs and you have your profit. This profit can be used in a variety of ways, but if you're looking to create long term wealth make the most of it.
In order to build up a network of properties that can provide you with a healthy, long-term income stream funnel your profits into acquiring more pieces of real estate. If you are making $1000 a month from a property and take that money and invest in five more properties over the next five years you will be making $5000 a month with little or no work on your part.
If the day-to-day operations of running rental properties don't appeal to you, then you can always hire a professional management firm to run them for you. Your level of involvement is up to you.
As you build up your properties, increase your rental property income and invest in more properties you will eventually end up with a steady flow of income and significant equity as your tenants have been paying your mortgage for you. You can liquidate the properties for cash or continue to let the rental checks role in!
The greatest thing about real estate investment is it gives you the freedom to decide how, when and how much you work!