Financial Independence Through Real Estate – Part 3

March 14th, 2008 | Stacey | Passive Income, Financial Freedom, Financial Independence

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The final entry of our financial independence through real estate series will discuss the formula to determine if a property is a good investment. To become financially free, you need to establish sources of passive income such as owning profitable real estate.

First, figure out the total income you will get when you own the property. Consider all rentals and sources of income and add them up. Now consider expenses of owning the property such as gas, electricity, maintenance, taxes and your mortgage. Some of these expenses will have to be estimated, such as utilities or taxes, because they vary from year to year. Subtract the expenses from the income to see your immediate profits for owning the property. Also consider that expenses rise but the value of owning property usually rises too. As you pay off the property, you will build larger equity and more wealth.

Real estate is a solid investment and provides an ongoing source of passive income as you build wealth. Choosing the right property can help you attain the financial independence you want. Working with honest real estate agents and financial planners can help you reach your goals for a financially free future.