The concept of vacancy, which I touched on in the last post, is one of the most important factors when investing in real estate for cash flow / income purposes.
People lose money or make bad investments primarily because they do not understand how to calculate it correctly.
Obviously, calculating vacancy is terribly difficult. What most investors seem to do is simply discount 10%, sometimes even only 5% from the gross value of the rent that they are supposed to get…and then they just hope that it works.
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