Everyone dreams of financial independence, right? The ability to wake up when you want to wake up, travel when you want to travel, and be their own boss are more than enough incentive! For most of us though, the idea of retiring early sounds like some woken dream that’s reserved for only the wealthiest of the wealthiest, right? Wrong. Finding your financial independence is easier and more attainable than you think! With Gavish Property Management, we can help you find the right rental properties and the right tenants to set you on the path for early retirement. Here is how rental properties help you reach financial independence.
Nobody likes to make a budget, but it’s the best way to find out the exact cost for how much you truly live on each month. Sit down and run these numbers and you’ll be able to come up with a number that you can use to set a goal for yourself. How much passive income do you need to earn in order to offset your cost of living?
How much will rental properties cost to purchase? How much can you make from them? When the mortgages are paid off, how much will you make a month from them? If you decide to sell them for a lump sum how much will you earn?
You need to sit and really crunch the numbers here. At the end of the day, real estate investing is a business and you should have a clear path that leads to financial freedom.
Something really cool happens when you start making a living from your rental property, the added flow of income gives you that much more of a cushion to start saving more. What does your current raving rate look like at the moment? Be honest. Do you save 10% of your monthly income? 20%? Maybe you don’t save at all and you would like to! A rental property is the best way to make that happen.
Let’s say that you make a fixed monthly income of $3,000 and you would like to have a saving rate of 50%. To accomplish this all you would have to do is cut back your spending and save the surplus.
Once you have a steady stream of income coming in from your rental property, you can start living off of the rent and start tucking away entire paychecks from your 9-to-5 day job. if you do this long enough you will be well on your way to reaching financial independence and early retirement. How many rental properties will you need to make this happen? It really just depends on how big of a portfolio you want to have.