Biggerpockets.com is a big real estate blog. They are one of the opinion makers in the real estate market. The latest article on their blog “Apartment Investing - A Look at Five Year Investment Returns” has generated a lot of interest lately. We will take a look at this article and add our opinion to give you a general overview of the information and how you can use this information to earn good money without breaking a sweat.

The main feature of this post is the practicality that we really need. A step by step plan as to how you can buy an apartment building and earn from it; expenses and earnings calculated to show you an easy example. The post says “Also, I will be using as an example an eight unit apartment building with a purchase price of $300,000.00. I want to use a smaller property with smaller numbers because I believe that just about anyone, who properly prepares him or her self with the proper education and preparation beforehand can realistically purchase, manage and profit from an apartment building this size. There are many methods for securing the money for a down payment that I discuss in my course but I don’t have the time right now to list and explain them all.” The main thing you can pick from this paragraph is that you can also do this even if you are stuck in a low-paying job or have big financial responsibilities. All you need is proper education, preparation beforehand and consider doing it in a step by step manner.

The most important part of this article is where the writer breaks down the expenses and everything to show you how you can earn from your investment. The article says, “The purchase price for our eight unit apartment building is $300,000.00. We are using a bank loan for 75% of the purchase price and we are making a down payment in the amount of $75,000.00. The Net Operating Income of the building is $27,750.00. Our annual mortgage payment on the property is $19,952.76 based on our 25 year bank loan with a fixed interest rate of 7.5%. After paying our mortgage payment the building’s cash flow is $7,798.00. This cash flow gives us a cash-on-cash return of 10.4%. (the cash flow of $7,798.00 divided by the down payment of $75,000.00.)” You can learn a lot from this example. It is in fact benefits cost management information that you should really understand to comprehend the whole idea of earning from your real estate investment.

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n a nutshell, it is one of the most informative articles, I have come across recently. I am sure you can benefit a lot from it since it is a practical thing with stats and figures. You can now safely consider buying an apartment on mortgage and actually earning from it without even bothering about installments and returns.