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)