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
Learn more about your ad choices. Visit megaphone.fm/adchoices
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
310: How to Grow Your Rental Portfolio EVEN Faster w/Real Estate Partnerships
309: How to Quit Your W2 Job and Replace Your Income with Just 6 Rentals w/Travis Hall
308: Rookie Reply: Don’t Chase Cash Flow! Use THIS Metric to Analyze Your Deals
307: How to Protect Your Rental from Fires, Floods, Lawsuits, and Liability
306: Achieving FI with Fewer Doors: The Small and Mighty Real Estate Portfolio w/Chad Carson
305: The Rookie’s Guide to Analyzing Rental Properties and Airbnbs in 2023
304: Rookie Reply: Don't Have 20% Down? Here's How to Fund Your Next Investment
303: How to “Supercharge” Your Real Estate Portfolio with Investor Meetups w/Spencer Carpenter
302: Rookie Reply: How to Get 100% Financing for ALL of Your Real Estate Deals
Bonus: Hiring a Contractor For Your Rental? What You NEED to Know
301: 12 Doors and a $4M Portfolio as a Real Estate Power Couple w/Zosia Madden
300: Making $8K/Month from 2 Doors and How to Get HUGE Cash Flow with Fewer Units w/Rachel Richards
Create your
podcast in
minutes
It is Free
The emPOWERed Half Hour
BiggerPockets Real Estate Podcast
BiggerPockets Money Podcast
BiggerPockets Business Podcast
BiggerPockets Daily
The InvestHER Podcast