One question I hear all the time from potential investors is, “when will I make back my money from an investment property?” Simply put, this is the wrong mindset! This mindset will limit you in your efforts to earn a passive income.
If you’ve ever read Rich Dad Poor Dad, you’ll know that wondering about when you’ll make your money back isn’t a productive mode of thinking. When you become a real estate investor, you need to think of your investment as a stream of cash, not a pile of cash.
Let’s say you have $40,000 sitting in a bank account. Maybe, if you’re lucky, you might be earning 1% interest. But if you take those funds to purchase a rental property, that changes your circumstances drastically.
When you purchase a $40,000 home, not only are you increasing your net worth, but also you have consistent cash flow coming in from renters on a monthly basis. For our properties, we typically bring in $700 every month on a single-family home.
This investment isn’t some stock you’re going to sell back for profit. It doesn't really matter when you'll make your money back. I can assure you that you will, but that's not the point.
The point is, it’s no longer just a pile of cash sitting in an account. Now, it’s a cash-flowing asset. It’s producing a stream of cash for you every single month. Streams of cash are what will bring you financial freedom!