Real Estate Residual Income

Real estate residual income was the first kind of residual income that I wanted to really focus on personally. I've looked into it in the past very seriously, and honestly, I had been stuck at the stage of analysis - AKA "analysis paralysis". Asokan and I decided once and for all, to simply start putting in more offers. After several weeks of putting in offers and learning a whole lot in the process, we finally bought our first duplex. By first analyzing the numbers, we discovered that the property generated residual income or "positive cash flow" if rented at current market rents. We then put in an offer, which was negotiated and eventually accepted. After the offer was accepted, we inspected the property and got the official go ahead from our mortgage broker.

When I'm talking about creating residual income through real estate, I'm talking about buying real estate that has a positive cash flow. The rent that is paid to you by your tenants will pay you in two ways: 1) The reduction of principal on your mortgage, 2) Cash flow (the money that's left over after paying all of your expenses). You also can make money through the appreciation of your real estate. The main thing though is to ensure that the property generates positive cash flow...

To find out how to figure out if real estate will provide you with residual income or not, check out Don Campbell's book "Real Estate Investing in Canada" and his website which are devoted to creating real estate residual income.