Tenant Pool Considerations
A Good Tenant
The only way to have a dependable passive income is if your property is continuously occupied by a "good" tenant. A good tenant is someone who:
- Has stable employment in a market segment that is very likely to be stable or improve over time
- Pays all the rent on schedule
- Takes care of the property
- Does not cause problems with neighbors
- Does not engage in illegal activities while on the property
- Stays for many years
Las Vegas Tenant Pool Segment Characteristics
Dependable Passive Income Steps
Apparent vs. Probable Return
Apparent return
Below is a simplified return formula.
- ROI = (Income - DebtService - ManagementFee - Insurance - RETax) / ( Acquisition Cost)
Probable Return
- Transient: ROI = (Income - DebtService - ManagementFee - Insurance - RETax - $3,200) / ( Acquisition Cost)
- Permanent: ROI = (Income - DebtService - ManagementFee - Insurance - RETax - $400) / ( Acquisition Cost)
- Transitional: ROI = (Income - DebtService - ManagementFee - Insurance - RETax - $3,500) / ( Acquisition Cost)