How to Generate $1,000,000 per year in Rental Income
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.

Read more: Short Sales and Foreclosures: Which One Should Real Estate Investors Buy?
Breakdown Calculation
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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