INCOME STREAM1: RENTAL INCOME FROM REAL ESTATE

Okay, It's been too long since we continued our discussion on sources of passive income. So now I'll discuss the first one that I know of, namely REAL ESTATE. We are not talking of just any real estate, it has to be income generating, so in a sense it has to be real estate that we can rent out. This type of real estate can be in the form of an apartment, a house, a building, etc. as long as we can RENT IT OUT. Remember the most important criteria when buying is that THE AMOUNT THAT YOU WILL RECEIVE AS RENT SHOULD BE GREATER THAN THE MONTHLY AMORTIZATION THAT YOU PAY FOR THE FINANCING OF THE SAID PROPERTY.

In a nutshell, this is how it works..

1. You purchase a rental property with a minimum downpayment (20%max) and you finance the remainder of the purchase price via a bank or any other lending entity.

2. In exchange for financing your purchase, the bank or any lender will charge interest on top of your loan amount and will demand that you pay them a monthly amortization over the term of the loan (sometimes this can be as long as 30 years) to slowly pay off the loan and interest. 

3. The monthly rental amount SHOULD ALWAYS BE GREATER than the monthly amortization for you to generate passive income.

That is the basic theory.. Below are books that show different strategies on how to implement your real estate investment program/s..

for financial intelligence basics, this is a must read...

to learn how to value and buy properties cheap...

this reveals how to buy foreclosed properties in the Philippines...