The Moment Money Matters - 50% Rule

This rule is one that I learned a long time ago when deciding if a buy and hold will sustain itself with cash flow in the long run. Many people are under the impression that anything above the mortgage of their property that they can collect in rent will be their profit on the investment. This is tricky because there are A LOT of unanticipated expenses. One of the easiest ways to do a quick evaluation as to if a property will cash flow enough is to multiple the P&I by 2 or divide the rent in half. What you are left over with is considered your profit.

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