Anyone out there achieve $10K/mo passive income after tax?

[Craig Moore]

Hi BP,

I know this may seem like an odd question and one I don't expect many people to answer for privacy concerns and not wanting people knowing your personal finances. 

I would like to know if there are any people out there who have exceeded what my personal goal is: ($10k/mo. passive income from rentals). This is the smallest my goal will be and it will only grow as I get older but it would be cool to connect with people who have done this or are close to it. If speaking about it on a public forum is too revealing, feel free to message me.

Disclaimer: I am only 23 and I am looking to reach this number by my 30th birthday. I can no longer think and talk, I must take action. I hope to read some inspiring stories! Thanks BP!

[Thomas S.]

Investors that believe paying off a property enhances the bottom line are missing the true value of equity. Every income property has two separate income streams one being the property the other the equity. When you pay down or pay off a property the increased cash flow is not from the property but rather the equity. That return can be earned anywhere that cash is invested and does not need to be in a labour intensive vehicle like rentals.

If you have 10 properties each worth $250,000 all paid off you have 2.5M in equity. @5% return it would generate $10416/month. Most likely that would be the total positive cash flow the property would generate. Therefor the property itself is generating 0 or at best very little.

In that case there is no financial advantage to actually owning the property and it would be far easier to simply invest in something truly passive.  

This is the reason leverage is the true value of owning income investment properties. Paying cash steals cash flow from the property and in real terms is only saving the prevailing mortgage rate which today is negligible. Your equity is being undervalued, wasted, dead and buried.

My money is worth far more than the meager returns it would earn buried in a rental property but to each their own.