How Much Real Estate Would an Investor Need to Acquire Today to Receive 1 Million in Annual Cash Flow in the Future

Factoring for time works in an investor's favor because it allows the investor to account for appreciation in real estate values and rents, both of which historically tend to appreciate at around 5 percent a year. Using the same assumptions but this time including our regular 20 percent down payment for 15-year or 30-year mortgages, let's examine how much real estate an investor would have to acquire today to achieve $1 million in unearned income in 10, 20, or 30 years. This time we'll allow our hypo-

thetical investor to let the market forces work in her or his favor. The chart below depicts six different scenarios in which this could play out. Three are for 15-year mortgages, and three are for 30-year mortgages. Pick a quadrant that matches your time line and take a moment to consider the numbers.

$IMillion in Annual Pre-Tax Income Buy It Now—Receive It In the Future

10 Years on a 15-Year Mortgage |

1 10 Years on a 30-Year Mortgage |

Annual Cash Flow Per Home

Number of Homes Owned

Total Annual Pre TaxIncome

Annual Cash Flow Per Home

Number of Homes Owned

Total Annual Pre TaxIncome

$ 3,477.39

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