How to Achieve Financial Freedom with Rental Properties

Ying Tang

Member since 2025 · 321 posts · 119 votes

1y

Thanks for sharing!

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

1y

I want to bring some reality to the situation which is 99.9% of us do not become financially free through rental properties (or real estate). Its a great asset class that is a long term play, but those thinking to get financially free at a young age, I would say go into tech.

I graduated with a friend, same degree. In 2011 he went and worked in tech for NVIDIA, I have been in real estate. His net worth is 5x mine and mine is pretty darn good. He is financially and time independent. Getting their through rentals is great for building wealth but do not count on leaving your job unless you are becoming active in real estate which is still a job.

Sorry just my 2 cents.

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Stone Pittman
Member since 2025 · 10 posts · 4 votes
1y
@Chris Seveney is like to disagree just a bit. Is your friend really financially free? From my understanding financially free means you can be without a job and live the lifestyle you desire. Your friend has a job that he has to continue to go to, without it, and without investing elsewhere, he is not financially free. Also, in order to reach that you need to excel in certain skills, study hard, and go through probably atleast four years of college. Real estate is accessible to anybody. I think it is also worth mentioning that nvidia is one of the top paying tech companies. To get a degree in tech doesn't guarantee you a job there or somewhere else that pays that much.

The reality is real estate very much can get you to financial freedom. What you're saying that I agree with is that it's going to take time, it won't happen tomorrow.
1 Reply
Jon K.
Rental Property Investor · Perry Hall, MD · Member since 2016 · 587 posts · 599 votes
1y
Quote from @Chris Seveney:

I want to bring some reality to the situation which is 99.9% of us do not become financially free through rental properties (or real estate). Its a great asset class that is a long term play, but those thinking to get financially free at a young age, I would say go into tech.
I graduated with a friend, same degree. In 2011 he went and worked in tech for NVIDIA, I have been in real estate. His net worth is 5x mine and mine is pretty darn good. He is financially and time independent. Getting their through rentals is great for building wealth but do not count on leaving your job unless you are becoming active in real estate which is still a job.
Sorry just my 2 cents.

I don't disagree that getting into a high-paying career like tech can help, but NVIDIA is a bit of an outlier due to what their stock has done over the past few years. I've been in tech for almost 25 years. My network includes hundreds of others in the industry. Receiving stock as part of your compensation is common enough. I know a few individuals who have achieved financial freedom due to being lucky enough to have their stock increase in value significantly without selling it beforehand which is not an easy thing to do when stock makes up a significant portion of your total compensation. And for everyone who held their stock until it went to the moon, there are plenty of others who held it and watched it move at a more modest pace if at all. The vast majority of tech employees that I know are still working in their 40s and 50s because they have to, not because they want to.
In other words one should not count on becoming financially free at an early age simply by being in the industry. Luck is a big factor.

Combine that high paying career with smart investing and now you're on the right path.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Stone Pittman:

@Chris Seveney is like to disagree just a bit. Is your friend really financially free? From my understanding financially free means you can be without a job and live the lifestyle you desire. Your friend has a job that he has to continue to go to, without it, and without investing elsewhere, he is not financially free. Also, in order to reach that you need to excel in certain skills, study hard, and go through probably atleast four years of college. Real estate is accessible to anybody. I think it is also worth mentioning that nvidia is one of the top paying tech companies. To get a degree in tech doesn't guarantee you a job there or somewhere else that pays that much.

The reality is real estate very much can get you to financial freedom. What you're saying that I agree with is that it's going to take time, it won't happen tomorrow.

owing rentals in any other manner than a REIT or NNN is going to be a job to dont kid yourself and if your self managing and you have a lot of rentals it can be a full time giig.. some like it some like me cant stand it LOL.
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Stone Pittman
Member since 2025 · 10 posts · 4 votes
1y
@Jay Hinrichs sure it can be a job. It'll take a lot of hard work and time but I believe you know that after all that is said and done you can outsource a lot of the management and responsibilities and be more or less hands off while still receiving the money you need to fulfill your lifestyle. The initial argument stands that real estate is more accessible to everyone than going to college for 4+ years and luckily landing a job at the best tech company out there.
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Stone Pittman

Member since 2025 · 10 posts · 4 votes

1y

Thank you for this post man I've read this same message in half a dozen diff books but it's always nice to read it again.

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Ray Lin

Rental Property Investor · MS · Member since 2018 · 67 posts · 46 votes

1y

Financial freedom from real estate is definitely doable. It took me about 20 years. I graduated for college in 2003 and I went part time from my W2 job in 2023. I still work part time at my current job, but lately my company has been losing a lot of business and letting staff go. I was working 1 day a week to 1 day month. Luckily, my rental portfolio is sustaining my life style. Real estate was my side hustle, turned full-time. I am treating real estate as a business and working "full-time", but I no longer have to punch in and out. In summer, I am able to take a 6 weeks vacation with my family and work remotely out of the country. Be patient and don't give up on real estate. Happy investing.

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V.G JasonPro Member

Investor · Member since 2022 · 3k+ posts · 3k+ votes

1y

Financial freedom won't happen in real estate unless you are able to defy the norm & participate in outliers

1) You bought in 2010-2020.

2) You bought or refinanced in 2020-2021

3) You've calculated inflation and notice every 12-15 years, you'll need 40-50% more. You've also set aside a tangible amount for medical care. Meaning if you're 40, you're making 150-200% more monthly knowing the dollar will decline in value to be able to live to 85. Knowing health care costs maybe in the $5-7k/month range.

4) Your leverage situation is capable of handling two troughs; not just RE, but any debt.

5) Your real estate is physically in shape(no major capex for 7 years +)

6) Your holding cash flow as 50% property reserves before profit.

7) Your location is quality enough to deter vacancies and, not or, keep very good tenants with average turns of 3, 4 years.

8) You have another stream of income, or two, that can cover 125% of your debt payments.

9) You're insured, mitigated against legal issues & natural disasters appropriately.

10) You're able to save 15-20% of your current income for real retirement age

If you dont have those things, you're not financially free. Quit focusing on this obscenely overused terms & just develop.

There's just a handful of people that post on this forum that can wake up and do whatever they want. Quit comparing yourself to them and compare yourself to how where you been and how you're going to move forward.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @V.G Jason:

Financial freedom won't happen in real estate unless you are able to defy the norm & participate in outliers
1) You bought in 2010-2020.
2) You bought or refinanced in 2020-2021
3) You've calculated inflation and notice every 12-15 years, you'll need 40-50% more. You've also set aside a tangible amount for medical care. Meaning if you're 40, you're making 150-200% more monthly knowing the dollar will decline in value to be able to live to 85. Knowing health care costs maybe in the $5-7k/month range.
4) Your leverage situation is capable of handling two troughs; not just RE, but any debt.
5) Your real estate is physically in shape(no major capex for 7 years +)
6) Your holding cash flow as 50% property reserves before profit.
7) Your location is quality enough to deter vacancies and, not or, keep very good tenants with average turns of 3, 4 years.
8) You have another stream of income, or two, that can cover 125% of your debt payments.
9) You're insured, mitigated against legal issues & natural disasters appropriately.
10) You're able to save 15-20% of your current income for real retirement age
If you dont have those things, you're not financially free. Quit focusing on this obscenely overused terms & just develop.

There's just a handful of people that post on this forum that can wake up and do whatever they want. Quit comparing yourself to them and compare yourself to how where you been and how you're going to move forward.

Touche' I start at 5am every morning and work many weekends.. I work for myself but non the less I work and I only have 4 rental props. Renting our money works the same way but no tax bene's so we do need to make more than normal.. as well as being self employed a lot of folks have no clue how much it cost to be truly self employed or when kids need things or kids collage.. one of my clients Daughter just got accepted to Duke. He calls me Sat and wants a run down on our deals as he will need 400k to put her through 4 years.. I know paying for kids Collage is a very personal thing to many.. But for me I keep working as i put both my kids through Collage so they did not start their careers in Debt.. So we work and work more and well for me I would be board to tears if we could not be renting our funds out consistently.
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Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

1y

Quote from @Enrique Jevons:

Becoming financially free through rentals is absolutely doable with the right strategy. Here’s a simplified roadmap:

1. Choose the Right Markets
Look for areas with strong rental demand, low vacancy rates, job growth, and solid local amenities. A good location is key to consistent cash flow.

2. Buy Smart
Focus on properties in good condition that offer positive cash flow from day one. Pay attention to neighborhood quality, tenant demand, and future appreciation potential.

3. Manage Efficiently
Screen tenants thoroughly, set fair market rents, and stay on top of maintenance. A well-managed property keeps tenants longer and minimizes headaches.

4. Diversify Your Portfolio
Don’t rely on one property or market. Mix in single-family, multifamily, and different locations to reduce risk and boost long-term returns.

5. Leverage and Reinvest
Use financing wisely to grow your portfolio. Reinvest cash flow and profits into new deals or property improvements to build momentum.

6. Play the Long Game
Real estate wealth builds over time. Be patient, stay disciplined, and let your portfolio grow steadily.

7. Keep Learning
Markets change, so should you. Stay sharp with books, podcasts, local meetups, and forums like BiggerPockets.

8. Work with Pros
Lean on accountants, attorneys, and experienced investors. The right advice can save you time, money, and stress.

Simple steps, consistent action, and a long-term mindset. That’s the real estate game.

Want help building your plan or analyzing a deal? Drop a comment!

I take exception to your first statement associated with buy smart: “Focus on properties in good condition that offer positive cash flow from day one.”

1) the property that has the best initial cash flow is unlikely to have the best cash flow over a long hold. In addition market where most purchases are cash flow negative the property with positive initial cash flow when including all sustaining expenses is unlikely to be the property to provide the best cash flow over the long hold. To illustrate this point, look at markets that still have 1% ratio purchases. Can you find any that have legit 1% ratio properties that has rent growth in this century in the upper 50% of markets? I doubt it. It is much smarter to look for markets that project significant rent growth than the market with positive initial cash flow. In addition, can you find any market that has 1% ratio properties that has above average appreciation? I doubt it. Going for the initial cash flow is likely to result in an inferior RE investment for a long hold. The Initial cash flow typically is inverse relationship with long term cash flow.
2) the most common and easiest value add for most newer RE investors is the rehab. Adding value via sweat equity can boost early returns which can help get to the point where rent growth provides sustainable cash flow.

i find you second statement associated with buy smart to be the far better advice “Pay attention to neighborhood quality, tenant demand, and future appreciation potential.” The appreciation is tightly coupled to rent growth.. you purchase in a market with superior appreciation and you likely will have a property with superior long term appreciation.

so my buy smart can include good/great value add assets which often are not in good condition along with your second statement.

My only other suggestion to your list is that your list appears to be ordered chronologically but learning is at the bottom. Chronologically learning should be at or near the top. Ordering the list in importance would have learning and long game near or at the top.

good luck

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Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

1y

@Dan H.

agree. there is no such thing as 'cash flow from day 1.' is there a way to buy without paying closing costs?

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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
1y
Quote from @Nicholas L.:

@Dan H.
agree. there is no such thing as 'cash flow from day 1.' is there a way to buy without paying closing costs?

If the appraisal comes in to allow it, the seller can rebate points toward closing on traditional financing. There is a limit set be f/f as to what the seller can rebate. VA loans I believe also can have no closing cost option. There is also alternate financing options such as owner financing or sub to that typically have significantly reduced closing costs (recommend most people get an appraisal even if unnecessary for the financing (such as owner financed or sub to).
Most of the time there will be some closing costs even with the options above.
Best wishes
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Jon K.
Rental Property Investor · Perry Hall, MD · Member since 2016 · 587 posts · 599 votes
1y
Quote from @Nicholas L.:

@Dan H.
agree. there is no such thing as 'cash flow from day 1.' is there a way to buy without paying closing costs?

It may be uncommon but it's not impossible. I'm participating in a syndication as an LP right now that was cash flowing before the operators purchased it and continued to do so after. I've also bought turnkey single family rentals whose vacancies I was able to fill before the first mortgage payment was due. I'd say that counts as well.

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Scott Mac

Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes

1y

What about the big lion In the room ? ? ?

Cold hard money in the bank for closing costs, down payments, cash reserves for hard times, cash reserves for capital expenditures, cash reserves for insurance, etc..

Theories are all in well, but when reality hits it's cash that's needed.

And while you can say you can stack things up like a house of cards borrowing against one property to fund another , yes you can but that tends to wipe out your cash flow postponing owning the properties outright and increasing risk of loss through foreclosure .

Just my 2 cents!

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Rob K.

Encinitas, CA · Member since 2011 · 191 posts · 252 votes

1y

So I started investing in real estate rentals about 32 years ago. I now have 21 rental units with my last mortgage paid off about 2 years ago. It was not so much a plan I started then, but more of an evolution. It started when my wife and I decided to hold on to the condos we each lived in before buying our primary shortly after we got married. Picking up some properties cheap during the 2008-11 financial crisis helped. For most of my life I was busy with a professional career while slowly growing my real estate portfolio. Some of my guiding principals that got me to this point:

1) Buy and hold for the long term in good areas. I have rarely sold anything and never done a 1031 exchange. Not having frequent transaction costs in and out helps in the long run.

2) Any refinance I have done has reduced my rate and shortened, not extended my loan term. Aside from using credit lines on my rentals for other investments (when they were cheap and more readily available) I have never taken cash out on a refinance.

3) I have never planned to rely solely on rental income to pay life's expenses, but over the long term, as mortgages have paid off, positive rental income has improved dramatically to the point where rentals do more than cover my family's expenses.

4) The idea of dead equity used to bother me, but I came to learn to accept and embrace it. Its there to utilize if I need it, but I don't think I will ever need to. I don't have any credit lines on my properties currently.

5) Real estate is a people business. Treat it as a business and treat your tenants and vendors fairly. Address any situation to avoid a build up of resentment if possible. Your good reputation pays back dividends and makes the real estate journey easier.

Not everyone has the mentality and fortitude to be an effective landlord. I am able to do it but it became evident early on that my wife was not cut out for it.

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Shiloh LundahlPro Member

Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

1y

@Enrique Jevons You mentioned many ideas and principles of investing. All those principles are good, however, I think you missed on the most important principle and that is to have an unfair advantage. With the amount of competition trying to do everything you mentioned above, you can get beat out of every deal unless you have some sort of unfair advantage such as 1) Lots of money, 2) A greater knowledge of the location, 3) More speed than others, 4) A niche strategy that's not over saturated, etc.

Those are sound principle that you mentioned, but unless someone develops an unfair advantage, it is likely that the deals that may fit the criteria above, will be snatched up by people who are quicker, or have more money, or have more knowledge or a greater strategy.

So in addition to investing with sound principles, I would say that you need to develop an unfair advantage to really be successful in today's market.

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Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

1y

@Shiloh Lundahl

totally agree. i think in today's market you either 1. have to have an unfair advantage, in your words, or 2. be willing to wait longer and accept a lower return in the short term.

@Dan H.

thanks for your response! I was asking rhetorically about closing costs and i see that that was not clear now. the point i was making is that new investors can't even get to closing without being disappointed / surprised / losing out on that 'cash flow' when they hit closing costs - the 5 to 10 to sometimes 15 to 20 thousand dollars you have to pay just to acquire a property.

my question is always - if you're cash flowing $38 a month, and you paid $10K in closing costs, when do you truly start netting income?

Now, that of course omits all the other benefits of real estate investing. but it's what many new investors are focused on. and there is still so much cheerleading from other forum participants on properties that 'cash flow day 1.'

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Gregory SchwartzBusiness Member

Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes

1y

1. Buy a rental property that breaks even
2. Get a high-paying job $300k+ per year
3. Live off half, invest the rest for 10 years ($1.5m is 20% down on $7.5m worth of REI)
4. Retire

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How to Achieve Financial Freedom with Rental Properties

How to Achieve Financial Freedom with Rental Properties

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