Goal in 2018-2025: $1,000,000 Rental Income Per Year
On December 22, 2017, I determine that by the time I reach 35 years of age, I will have a real estate portfolio that generates $1,000,000 rental income per year. Right now, I am 28 years old. I will have another 7 years to make my dream become true.
For many people who thinks this goal is impossible, I agree. For anyone who believe this goal is feasible, I am grateful that we have the same passion and mindset in life. No matter where you are and what you are doing, I wish the best for you!!!
Step-by-Step on how to generate $1,000,000 Rental Income
Fortunately, I am a number guy who loves playing around with numbers. This habit really helps me develop great career in Finance (especially Financial Analysis). I am also a future-oriented guy who truly believes in my ability to make things happen.
Therefore, 2018 will be a great year ahead for me. Let’s go in details about my goal and actions in 2018: generate $1,000,000 per year in rental income. Technically, I have a great advantage in specializing in Finance. Also, I am pursuing a real estate license, which I believe, will significantly helps me get the cutting edge while looking for ways to succeed in the real estate market.
Let’s do some quick math: I want to create $1,000,000 in 7 years of rental income.
On average, I must create $142,858 in annual rental income ($1,000,000 divided by 7).
This number looks “huge” at first. However, when I break it down by months, the numbers look much more feasible: $11,905 in monthly rental income (or 142,858 divided by 12).
However, investing in the real estate market does not guarantee consistent incomes. Some months, I expect to have a high vacancy rate, which results in a great reduction of rental income. To obtain a reasonable vacancy rate, I will need to hire a property management company. As a result, I expect to pay some expenses to keep the system running smoothly. My budget for the property management team is about 10% of the rental income.
Before I reach to that level, my only goal for this year is to acquire 3 residential properties in my area (Central Valley, California) that can generate at least $12,000 monthly. Here are the breakdowns for each property:
Purchase Price: $575,000
Monthly Rental Income: $4,000
(-) Down Payment (10%): $57,500
(-) Closing Cost and Other Fees: 10% of Purchase Price
Total Capital: $57,500 + $575,000*10% = $115,00
Total Required Capital for 3 Properties: $345,000*
*Millionaire Question: How do I get this $345,000? I will share with you how I obtain this initial capital to achieve my goal.
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As a happy student of life, Huy has discovered that life is a series of very interesting courses where he can’t just simply learn from books or schools. Fortunately, every person that he meets and every incident that he faces truly give him tremendous valuable lessons. The most important aspect of being a student of life is that he learns things with a great intention: to improve himself everyday.
With a strong background in finance and business, Huy will share with you great lessons that he has learned over the years. Let’s share our knowledge so we will learn from each other!
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