How Bookkeeping Reveals a Rental Property’s True Cash FlowHow Bookkeeping Reveals a Rental Property’s True Cash Flow
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One of my clients, age 41, had built a good amount of savings. Income: ₹1.8L/month FD + Savings: ₹35L Mutual Funds: ₹6L SIP: ₹25K/month No loans. He was saving well. Then came an important question: What if part of that money was invested in a rental property? Let's take a simple real estate investment example. ₹20L goes toward the down payment on a rental property. The property generates ₹45,000 in monthly rental income. That is ₹5.4L in rent per year. At first, ₹5.4L sounds like a good return. But rent collected is not the same as profit. This is where real estate bookkeeping shows the full picture. Annual rental income: ₹5.4L Mortgage interest: ₹1.4L Property tax: ₹35K Repairs & maintenance: ₹45K Insurance: ₹20K Other property expenses: ₹30K After these expenses, around ₹2.7L remains before principal payments, income taxes, depreciation, vacancies, and major capital expenses. Now the investor can ask better questions. How much did I invest in this property? How much rental income did it generate? How much did the property cost to operate? How much cash am I actually keeping? And is this rental property performing the way I expected? This is why bookkeeping matters for real estate investors. Buying a rental property puts your money to work. Good bookkeeping shows you how that money is actually working. If you own rental properties, do you know what each property is really generating after expenses? #RealEstateInvesting #RealEstateBookkeeping #RentalProperty #Bookkeeping #CashFlow
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