How Many Cash Flowing Properties Do You Need To Retire Early?

How Many Cash Flowing Properties Do You Need To Retire Early?

Real Estate Broker · Bowling Green, KY · Member since 2014 · 30 posts · 8 votes

The number of cash flowing properties you need to retire early depends on several factors, including your financial goals, current expenses, and the amount of passive income you need to support your lifestyle. Here are some things to consider:

Financial goals: Determine the amount of passive income you need to achieve your financial goals, such as covering your living expenses, paying off debt, and building wealth.
Rental income: Consider the rental income you can generate from each property, as well as any expenses associated with owning and maintaining the property.
Savings and investments: Consider any other savings and investments you have, and how they can contribute to your passive income streams.
Location: The location of the properties can impact rental income and expenses, so consider the real estate market in the areas where you are investing.
It’s difficult to give a specific number, as the number of properties needed will vary based on individual circumstances. However, a general rule of thumb is to have enough properties generating enough passive income to cover your living expenses. This way, you can potentially retire early and live off the passive income from your properties.

It’s important to keep in mind that real estate investing is a long-term strategy and can be subject to market fluctuations, so it’s essential to have a solid financial plan in place and seek professional advice as needed.

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Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
3y

10 paid off properties in Las Vegas brings in about $250k in rent and about $200k/year net income. Your personal spending habits will determine if the number is 5 or 20. You might need an extra 1 if you live in a state with bad weather, income tax, high property tax, or high insurance. 

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  • Specialist · Frederick, MD · Member since 2017 · 475 posts · 454 votes
    3y

    John Schaub always mentions 10 free and clear houses. It's always made sense to me.

    Just about anywhere you live in the country if you own and collect rents on 10 free and clear houses in your local market, you'll be doing okay.

  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    3y

    @Greg Raymer When I started my journey with REI this question really stuck with me. I went down the rabbit hole doing basic calculations on my current properties and realized we're not even close to financial freedom. When I originally did those calculations I needed 28 comparable cash-flowing SFR to match my 9-5 income. That's just stupid. Not many investors set out to own 30 single family properties. It's not a good goal. Fun idea but not ideal from an investor and PM prospective. I also realized that number is constantly evolving and realistically growing. Inflation drives everything up. The number properties would only go down if cash-flow increased, debt decreased, or properties were paid off. For us that's not going to happen in the 10 years. 

    My retirement goal is mid 40's which gives me 9 years. It's an evolving goal because I can't predict the future and motivation. I stopped focusing on doors and started focusing on quality, building relationships, and adding value to investors. 

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    3y

    10 paid off properties in Las Vegas brings in about $250k in rent and about $200k/year net income. Your personal spending habits will determine if the number is 5 or 20. You might need an extra 1 if you live in a state with bad weather, income tax, high property tax, or high insurance. 

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