Anatomy of a Financial Statement - Property Management
Robert Kiyosaki likes real estate investing is because real estate touches each part of his financial statement. Starting with his best-selling book Rich Dad Poor Dad and continued in many of his subsequent books, Robert explains how real estate gives cash flow to his income statement and on the expense side of the income statement he's able to deduct the property's depreciation as an expense. When seen from the balance sheet, he's able to gain appreciation on the asset side and the leverage provided by the bank rounds out the liability side of the balance sheet. Through a property management company you can also access the four parts of the financial statement. Here's how: Balance Sheet: Asset Column Every property producing monthly rent is an asset. It is possible to sell the rights to manage the property to another property manager for a lump sum of money. Balance Sheet: Liability Column Robert uses his banker's money aka leverage in order to purchase a large p...