Investing in rental properties can be a great way to earn that passive income you have always wished for. Most people believe that in order to invest in a rental property, you must by with all cash. Ben encourages you to leverage your money by financing the property with a loan. This way, you will increase your rate of return, and keep money in your pocket to invest in other potential rental properties.
Ben suggests using the 50/50 rule. The rental amount should be at least double the combined amount you pay each month for your mortgage, taxes, insurance, and management payments. This insures that you will always attain positive cash flow, even if taxes, insurance, or other fees increase while you are paying down your note.
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