$500,000 Passive Income Per Year With Rental Properties?
Hello,
This is my first post, and am still very much in the learning/education phase of my REI journey. (So please dont be too hard on me!)
I'm 26 and my goal is to make $500,000 a year in passive income by acquiring rental properties. I want to reach this goal in 20 years. I've done some rough estimations using the following criteria.
Rentals Acquired Each Year: 5
Avg. Cashflow per property per month: $350
Avg. Purchase Price: $100,000
Down Payment on each house: 20%
If I were able to stick to this plan, I would be making $441,000 a year with 110 rental properties by the year 2036. That's AWESOME except for one thing: I would be in debt around $8 million.
Here is my question:
Even though I am making $441,000 a year, it would take 16+ years to pay off all my debt even if I devoted 100% of the income towards paying off the mortgage. The thing about rental properties that attracts me is the "worry-free" mindset that comes with it. However, due to the massive leverage that is being used, and thus huge debt, it doesn't seem like such a great option anymore. Thoughts?