Imagine your new job: picking one day each month to drive around town and collect checks with your name on them.
If you can handle simple math (think 2 + 2 = 4), you have everything you need to make this lifestyle a reality.
Let me show you exactly how it’s done.
A few months after hiring a new associate, he shared a story that perfectly explained the wealth-building potential of letting your money work for you.
This recent college graduate was living in an apartment at the time. After a casual conversation with his landlord, he realized how simple and lucrative the landlord’s job really was.
As he put it:
“All he does is drive around at the beginning of every month and pick up check after check after check!”
I couldn’t help but chuckle because this young man had stumbled upon one of real estate’s greatest secrets—it can transform your life into a series of paydays with almost no effort.
Of course, there’s a bit more to it than just driving around collecting checks, but not much more!
It’s just simple math…
What I love about real estate is knowing how profitable a deal will be before making it.
It all boils down to simple math.
Let’s use an example of buying and renting out apartments:
The key question is this: Will the rent I collect exceed the mortgage I’m paying?
You don’t need to guess—there are hundreds of free “mortgage calculators” online to help you figure this out before making a purchase. Pair that with tools like Zillow or Trulia to see what similar apartments in the area are renting for.
Here’s an example:
- If your mortgage payment is $800/month and similar apartments rent for $1,100/month, that’s a great deal—you’d pocket $300/month.
- But if your mortgage is $1,200/month, the deal doesn’t make sense, as you’d be losing money every month.
Once you’ve found a deal where the math works, you’re on your way to passive income.
Let’s break it down further:
If you’re making $300/month after mortgage payments, that’s $3,600/year. After just a few years, you’d have over $10,000 in rent payments—enough for the down payment on a second apartment.
With two properties, you’d now be earning $600/month, or $7,200/year. That’s double the income in half the time it took to save for the first apartment.
Add a third property, and your income grows to $900/month or $10,800/year. By the time you reach four properties, you’re earning $1,200/month or $14,400/year—all from collecting checks.
From there, you can:
- Go for a larger, more profitable property.
- Purchase your next apartment even faster.
This strategy allows your money to work for you, compounding your income as you reinvest.
Things to Keep in Mind…
While the math is simple, here are a few tips to make the process even smoother:
- Start with One Property
Even if it takes time to save for the first down payment, that first property sets the stage for everything else.
- Stick to One Area
Focus on a single market. This simplifies everything—from understanding property values to managing tenants and repairs.
- Be a Good Landlord
Make life easier for your tenants. Avoid extreme late-payment fees, and be prompt with repairs. A great landlord retains tenants for years, while a difficult one drives them away after just one lease.
The Payoff…
This isn’t a “get rich overnight” scheme. Building a real estate portfolio may take a decade, but by the end, your only “job” will be collecting rent checks each month.
Isn’t that worth it?
Start small, follow the math, and let your passive income grow. Soon enough, those monthly checks could become your new career.
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