# Is it worth buying at 150,000€ for 500€ monthly?

Real estate investment is a popular choice among investors looking to build a passive income stream and achieve long-term returns. Buying an apartment with the intention of renting it asks several crucial questions, including the convenience of the investment and the calculation necessary to achieve a monthly income goal, such as €2,000 from rentals alone. This article explores in detail whether it is worth investing €150,000 for an apartment to rent at €500 per month and how much you need to invest to achieve a monthly income flow of €2,000
through rentals.

## Investment Assessment

### Return on Investment

The purchase of a property from 150,000€ to rent it for 500€ per month implies an annual income of 6,000€. This corresponds to an annual gross return of 4%. This percentage does not take into account management expenses, maintenance, real estate taxes, or any vacation periods of the property, which can significantly reduce the net return.

Managing a leased property involves various costs:

• Maintenance and repairs: The costs of keeping the property in good condition may vary.
• Condominium fees: If the apartment is located in a condominium, there will be periodic condominium expenses.
• Real estate taxes: Local property taxes may affect performance.
• Vacation periods: Periods during which the apartment remains empty without generating income.

## Reach a Monthly Income Goal of €2,000

To achieve a monthly income of €2,000 by renting properties purchased at €150,000 each and rented at €500 per month, it is necessary to do some calculations.

### Calculation of the Number of Properties

Target Monthly Income÷Monthly Income per Apartment=Number of Apartments RequiredMonthly Income÷Monthly Income per Apartment=Number of Apartments Needed

2,000€÷500€=42,000€÷500€=4

To reach a monthly income of €2,000, you would need four apartments, each purchased for €150,000.

### Total Investment Required

Number of Apartments×Cost per Apartment=Total InvestmentNumber of Apartments×Cost per Apartment=Total Investment

4×150,000€=600,000€4×150,000€=600,000€

To obtain €2,000 per month in rents, you need an initial investment of €600,000 in four properties.

## Investor Considerations

### Income Flows and Diversification

While investing in rental properties can provide a relatively stable income stream, it’s important to consider diversifying your investments. Not trusting your entire investment portfolio to a single asset class can help mitigate risks
.

### Financial Leverage

The use of leverage, or financial leverage, through a mortgage loan can increase the return on the equity invested. However, it also involves increased financial risk.

### Capital Growth

In addition to rental income, a real estate investment can appreciate over time, offering the possibility of capital gains upon sale. The location and conditions of the real estate market play crucial roles in this aspect
.

Investing in rental properties can be an effective way to generate passive income, but it requires in-depth analysis and strategic planning. Considering the example of an investment of 150,000€ for a monthly return of 500€, and multiplying the transaction to achieve an income objective of 2,000€ per month, it is evident that this investment requires substantial capital and careful management of the properties. Before proceeding, evaluate all factors, including hidden costs, the possibility of a property appreciation, and your risk tolerance. Professional financial advice can offer additional insights to successfully navigate the real estate market.