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Turning homes into cash
Real Estate is one of the simplest ways to start earning passive income if you already have some saved money saved up. It can be done without money as well, however it will require more creativity and or sacrifice. For example, simply renting out a room in your house can be a great way to start earning some extra money every month. It will require the Sacrifice of some of your personal space but almost nothing more than that. Of course if you do not already own your own home this won’t necessarily be as easy for you.
Anyway, I just want to show you some examples of how simple this concept can be broken down for investing in having rental properties. Assume we’re interested in a $300,000.00 three bed, two bathroom property where similar rentals rent for $2,500.00 monthly. At 4% interest, your monthly mortgage payment would be just over $1,400.00 a month. Now most people can see that’s $1,100 in excess of the mortgage every month!
If there were no expense (which of course there are some) that would be just over $13,000.00 every year doing almost nothing at all! Also, that other $1,400.00 going towards the mortgage doesn’t just disappear either. Much of that is going into building equity in the home. So basically, it’s almost like a forced savings that you receive when you sell.
The rest of the $1,400.00 is being put towards the interest owed. Luckily for you, the interest on your first 2 homes is tax deductible! There are some other expenses as well included with owning real estate, however these too are all tax deductible!