Understanding Rental Property Returns

On this podcast episode I talk about rental property returns and the components that make up the rental income and the rental expenses.

As an example, I use a typical 3 bedroom 2 bathroom house that could be purchased for $250,000 in Port St Lucie FL. This house could be rented for $1,800 which would represent an annual gross rental income of $21,600.

I break down the expenses on a property like this to show you how the rental income and expenses would be broken out in order to arrive at your net rental income (which is your real return).

Gross Annual Income $21,600

Property Taxes $4,000

Property Insurance $3,000

Repairs & Maintenance $1,800

Vacancies and Evictions $1,800

Property Management $2,160

Net Rental Income $8,840.

If you were to purchase this property for the price of $250,000 and you paid cash, then your return of $8,840 on a $250,000 would return you only 3.5% on your cash. Now granted that’s better than a CD in the bank, but it’s still a low return.

So why invest in real estate? The answers are:

1. Appreciation

2. Tax Deductions

3. Leverage

4. Cash Flow

5. Creating Long Term Wealth

and Ultimately, creating Financial Freedom.

If you really want to leverage your returns and put your wealth creation on steroids, then you need to find properties at way below market prices. I use an example of a probate property on this podcast, but to find deals like this you need to be marketing to motivated sellers like people in foreclosure, vacant properties, tired landlords, inherited properties and probates (the example I use on this episode).

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Incredible podcast!

This podcast is a must listen for anyone looking to level up their real estate investing strategies! Lex is a great host and his conversations with guests reveal everything you need to know to succeed.


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Lex does such a good job covering a variety of topics. The guests offer valuable insight as well. I would recommend this podcast to anyone looking to be inspired and informed!


Absolutely Top Class!!!!

Excellent content from one of the top boots on the ground investor. Personally changed my life and my Real Estate investing career. Many thanks Lex for providing amazing content, mentorship and for sharing your knowledge and real world experience.


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Whether you're a seasoned real estate investor or just dipping your toes in, Lex is the guy you want in your corner - and your headphones! I cannot tell you how much I've learned from this show. Thanks a million, Lex!

Arlie K

Excellent Content!!!!!

This is a wonderful podcast to listen to with such valuable content. I was very interested to listen to your take on why one should purchase rental property.


Best real estate investor podcast.

Lex gives you real tips with actual names of multiple sites and services to use from the beginner up to advanced. I feel he’s giving away his classes for free on the podcast. Most podcasts stop short of details and give generic advice unless you join there groups.


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I’ve been looking to get into the world of real estate investing but everyone I ask gives me answers that makes it all sound way too easy. This podcast gives you the real deal. More please!

Anna B David

Great show for beginners or experts!

As an amateur flipper since I was in my teens, I kind of have gotten pretty good at identifying great opportunities and taking advantage of them. But, Lex dives much deeper and gives actionable tips on how to make sure you are looking at everthing before making any decisions. I'm hooked!

Mitche Graf

Be Prepared to Learn!

Two words: Information Dense. Sweet Moses. I’ve listened to other real estate investing podcasts but this by far is the most practical, the most hands-on podcast I have heard to date. You can tell that the host, Lex, is very passionate about real estate investing. That passion with his experience translates into an excellent podcast. He shares theory about a topic and then tells a story about his experiences in the real world. That to me is gold!

Cliff Duvernois