Home » Real Estate

Residual Income Through Real Estate can be Generated Through Rental Policies

Aug 17, 2007
Investment property is a good way to produce residual income through real estate. Rental income has two big advantages and these are actual flow of income and increase in property value.

To utilize this method, you have to buy property with income. Here income means a positive flow of cash. You can find out the cash flow by checking out the five year bank records and expenses incurred by the owner of the property. You should drop the deal if these records can't be provided easily. However if the owners do provide the record, you have to subtract the net expenses from the net income.

This will enable you to discover the net operative income. You will know the cash flow if you subtract the debt service fees from this net operative income. A positive cash flow means that you make more residual income through real estate.

After you find and buy the property you must look up the insurance aspect. The fine print of the insurance policy should be double checked to ensure there is adequate cover for common mishaps associated with tenancy. A common mistake made by most land lords that they assume that they are covered. However many find out later that the cover is severely limited.

Standard building insurance can have clauses that exclude accidental damage, damage by a tenant, cover for the loss of income and legal liability. However, these are the very reasons that you should make a claim. Therefore, you just check the insurance policy.

Let us look at these clauses that are excluded in more detail. Accidental damage should cover damage to a property that has been brought about unintentionally. These could also be damages made by the actions of small children. However general wear and tear is always excluded from this clause. Malicious damage by a tenant includes intentional damages that have been brought on the property, holes in the walls, doors that have been kicked and damaged floors and carpets.

Legal liability should included expenses that are incurred for law suits. These law suits may arise due to a damage or loss of property or a bodily injury suffered by a tenant. Loss of rental income covers payment for losses that are incurred on malicious damages to the property. You must make the most of residual income through real estate by checking whether the loss of rental income is properly covered. Defaulting payments, absconding tenants, vacant possession failure, tenant's death are some of the reason which lead to loss of rental income.

If you are a land lord of a property and also live on it, then you must obtain insurance, a mortgage disability. This will improve the rate of your residual income through real estate.

Rental income remains a great source to generate residual income through real estate.
About the Author
James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
Rating:
Please Rate:
(Average: Not rated)
Views: 141
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources