How do you know if a rental property will make enough cash flow before you buy? Budgeting is KEY. When breaking down a deal, it’s critical that you account for the costs of all capital expenditures (CapEx), maintenance, and repairs. Overlooking an important line item could easily put you in the red!
Welcome back to another Rookie Reply! In today’s episode, we’re going to show you how to budget for the everyday operating costs that come with owning rental properties, as well as how to set minimum cash flow requirements when analyzing a rental. Should you find a partner for your next house hack? We get into the potential advantages and disadvantages of joining forces with other investors. We also talk about the many tax benefits in real estate and whether you need a limited liability company (LLC) to maximize them!
If you want Ashley and Tony to answer a real estate question, you can submit a question here, post in the Real Estate Rookie Facebook Group, or call us at the Rookie Request Line (1-888-5-ROOKIE).
In This Episode We Cover
How to budget for everyday rental expenses, maintenance, and repairs
How to set minimum cash flow requirements when analyzing deals
The pros and cons of forming a real estate investing partnership for a house hack
How to distinguish capital expenditures from repairs and maintenance
Whether you NEED an LLC to reap all of the tax benefits of real estate investing
And So Much More!
(00:00) Intro
(00:31) Claiming Tax Write-Offs
(04:02) Budgeting for Property Expenses
(15:45) Partnering on a House Hack?
(23:42) CapEx vs. Repairs & Maintenance
(26:37) How Much Cash Flow Do You Need?
(32:37) Send Us Your Question!
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-404
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email: advertise@biggerpockets.com
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330: The Rookie’s Step-by-Step Guide to Home Renovation Projects w/Serena Norris
329: Buying a Rental Property for $80 with This Loan w/Clint Campbell
328: David Greene on The 3 "Pillars" of Wealth That Lead to Financial Freedom
327: From Parents’ Basement to Full-Time Investor and $2,500/Month with ONE Rental w/Noah Sprimont
326: The Step-by-Step Guide to Finding the BEST Off-Market Real Estate Deals w/Nate Robbins
325: How to Retire with “Turnkey” Rental Properties (as a COMPLETE Beginner) w/Sam Dolciné
324: Rookie Reply: How to Make an IRRESISTIBLE Offer Through Creative Financing
323: 10 Real Estate Deals in 18 Months After Losing 80% of His Income w/Matt Ramirez
322: Rookie Reply: Mortgage Write-Offs, Buying with an LLC, & Boozy Airbnb Gifts
321: The Fast Track to Financial Freedom & Turning $29K into $1.5M by Doing THIS w/Joe and Andrea DelGrosso
320: How to Work LESS and Earn MORE by Putting "Profit First" in Real Estate w/Mike Michalowicz
319: The Beginner’s Guide to Real Estate Development (with LOW Money Down!) w/Terry Harris
318: Rookie Reply: No Capital OR Credit? Get Deals Done with THIS Financing Tool
317: 7 Deals in 2 Years with HUGE Cash Flow: How to Grow Your Real Estate FAST w/Mackenzie Brogdon
316: Rookie Reply: Put THIS in Your Lease Agreement (So Tenants Don’t Break It!)
315: House Poor to HUGE Cash Flow by Doing THIS: Robuilt’s Rags-to-Riches Story w/Rob Abasolo
314: Rookie Reply: Mortgage Points, Seasoning Periods, and Cash-Out Refinancing 101
313: The REAL Side of Real Estate: When Rehabs and Rentals Go Wrong w/Tyrin Tyson
312: Rookie Reply: The Seller Hasn't Responded...What Do I Do?
311: DIY Real Estate Hacks That Will Save You a FORTUNE on Your Deals w/Shaun Kelly
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