When you make a mortgage payment on your own home, a portion goes toward principal paydown. However, YOUR WORK went into making that payment. With income property, YOUR TENANTS’ WORK made the principal paydown for you (they also paid your interest and your cash flow).
In Year 1 of your income property ownership, you often have about a 4% rate of return just from tenant-made principal paydown. This is one of only five ways you’re typically simultaneously paid as a real estate investor!
The five ways are:
2) Cash Flow
3) Tenant-Made Principal Paydown (covered in this video)
4) Tax Benefits