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
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422: Rookie Reply: How to Invest with $100K & Managing Home Renovations
421: Turning a “Failed” Property Into a $7K/Month Rental by Doing THIS Instead w/Kayley George
420: From Pizza Delivery Driver to 11 Rental Units Using Savvy Seller Financing w/Greyden Piechnick
419: How to Use Science to Find the Right People for Your Real Estate Business w/Richard Davis, Ph.D
418: My Property Manager Robbed and Ghosted Me ($40K Stolen!) w/BiggerPockets CEO Scott Trench
417: The “Underrated” Assets That Offer HUGE Cash Flow & Multiple Income Streams w/Dylan Kidd
416: How to Find & Fund MORE Real Estate Deals in 2024 (Tips from a PRO!) w/Henry Washington
415: $9K/Month Cash Flow, Scaling FAST, & Saving Thousands in Taxes by Doing THIS w/Riley McFarland
414: Financial Independence at 29 by Quitting Rentals to Invest in THIS w/Dillon Leonard
413: Rookie Reply: How to Invest in Real Estate While Working 9-5
412: Stay-at-Home Mom to “Accidental” Investor with a $600K/Year Business w/Terri-Leigh Huleis
411: ‘The Bachelorette’ Alum Tyler Cameron on Building a $3M Portfolio in 3 Years!
410: Fundamentals of Funding: How to Finance Real Estate Without the Big Banks w/Henry Washington
409: Fundamentals of Funding: How to Get Approved for a Mortgage (Step-by-Step) w/Jeff Welgan
408: Fundamentals of Funding: How to Find the Right Lender for Your Next Rental w/Joe Coleman
407: Stop Paying Someone Else’s Mortgage: Beginner Steps to Buy Your FIRST Home w/Aaron Mann
406: Inside Our FIRST Commercial Real Estate Deal (A 13-Unit Hotel!) w/Tony & Sara Robinson
405: Financial Freedom in 3 Years by Scaling with Small Multifamily w/Dan Marklin
403: House Hacking Blunder to $2.7 Million in Small Multifamily by Doing THIS w/Sean Reischel
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