You should be able to raise rents with a rehab so your cashflow should increase over time.Dont stop putting money into the property checking account.

I retired early nearly four years ago and needed to increase passive income to fill the income gap created by my paycheck's ending.

It's factored into the cash-on-cash return and increases it so it makes the returns look much better and the property more attractive in certain ways.What is this principal reduction?

I’ll give you a simple hypothetical.

Friends of the BP,I would like to ask a simple question.

As her income increases, I look to pay down our line of credit and snowball our early loans. 

The combo to remove the lock box is in reality a simple algorithm from the combination to open the lock box but the tenants do not know the algorithm.We allow one lock out a year without charge. 

Other times we need to look at the income approach, or we can look back at a longer period of time until we can find a comp and then adjust for market increases. 

It's actually not quite as simple as that though. 

A quick glance at housing affordability in AustinMedian Household Income App (Forbes): $73,493 ($6,124/mos)Cost of Living (Forbes): 15% above nat'l avgMedian Home Cost (SFR-ABOR Stats): $302,250Assume 5% Down Payment Conventional Loan- 30 year amortization- $15,112.50 down pmt + any closing costs• Percentage of residents with less than $1,000 saved: 56%• https://www.gobankingrates.com/…/…/americans-savings-state/…- $287,137.50 amt financed- 4.375% interest rateHow the payment looks:PI= $1,433 mosIns= $105 mosTaxes= $458.33 mos (Assume $5,500/yr)HOA= $25 mos$2,021.3/mos PITIDTI’sHousing ratio= app 33% @ median income ($2021/$6124)FHA should be at 31% or less with Conv/VA/FHA being around the same although all have exceptions in placeTotal DTIThese hover between high 30%’s to manually underwritten total DTI’s in the 50’s or higher depending on the programs@ 45% Total DTI Ratio and assuming the above PITI pmt that gives a borrower approximately $734 per month in all other creditor debt (cars/cc/personal loans/etc)These numbers are not perfect but are rather a quick illustration of current housing affordability in Austin for Retail Buyers.Summary: Housing is becoming less and less affordable in the COA for end retail buyersAssuming increases in property taxes/insurance/interest rates on the horizon how does this affect us as investors?