4 expense you need to take care when investing Real Estate

1. Principle. This is the amount of money you pay to reduce your outstanding balance. Usually, with most loan that you found in current market, your mortgage payment portion goes toward your principle is very "small" in the first 5 years. After that, the principle will gradually increase until the end of the loan term
2. Interest. Since you're likely to get a loan from bank, you have to pay interest to acquire the loan. This interest payment make up a largest amount of your real estate expense.
3. Tax. This is the property tax you pay to government. Usually it is 1-3% (depending on which state property located in) of your purchase price.
4. Insurance. You need to buy insurance to protect your valuable assest. The typical insurance you need to buy is Fire plus liability.

Remember, PITI. As a smart real estate investor, it is your objective to mimize the expense in each area, so you can have a higher chance to get postive cash flow . (Meaning Income greater than expense)