Im interested in investing in small apartment buildings and fourplex homes how do you make monthly profit?
From what i have heard you do not what the hell is the point then i would assume on an a 8 unit apartment building at 800 dollars per unit=6400 dollars a month you would make some cash! I have read you do not i understand taxes mortgage and some maintenance but after all of that i think you could make like 2500 hundred a month right?
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It depends on the cost of the building and the amount of your down payment, but it is unlikely that you could make that much unless you got a very good deal on the building. A rule of thumb is that buying rental units is a good investment if that the monthly rents are equal to 1% of the purchase price, so if you can buy such a building for $640,000 it is a good deal. Assuming that you have a 20% down payment, which is what banks want these days, you would have to have $128,000 in cash. Besides the things you mentioned you also need to pay for insurance and allow for the fact the rental units are vacant 5 to10% of the time and it usually cost a month rent as a fee to a real estate company to get a new tenant.
Well, if you are planning to pay cash for income property, then you can make a respectable return unless you make a lot of mistakes. Almost no one can pay cash, and that is where people lose their wazoo. I personally feel that you should have at least 30 to 50% down to be sure of just breaking even.
Money is made in income property in three ways: Tax benefits, reduction of principal of the loan, and leverage.