Building up multiple income streams is one of the best ways to make sure that your future offers security. The year 2020 has taught all of us that having access to funds from a variety of sources, and even ways to turn part time work into full time dollars, is critical to protecting you and your families from major global crises.
Passive Income From Real Estate Investing
Investing in rental properties will take some legwork. The passive part of the income shows up after you’ve
- found the property
- gotten the financing, and
- located the right tenants
The goal when investing in real estate is that the tenants will pay the mortgage and give you some cash to put in your pocket, as well as allowing you to build up money for repairs.
It’s a good idea to hire a rental manager for your properties as well if you want truly passive income. A quality rental manager has a strong rolodex of repair professionals. They can also run credit and criminal background checks on your potential renters to get the best folks in the space.
Why Passive Income is Important
Passive income is money that continues to come in after you’ve only done the work once. If you’re always trading your hours for dollars, or earning active income, you may eventually be able to retire and enjoy your remaining time. However, only having access to active income makes you extremely vulnerable in the event of a market crash or major global health crisis.
It’s critically important that you secure your own living space before investing in someone else’s. You’ll want a home that’s at least secure if not fully paid for, and you’ll need savings for your own emergencies as well as any surprise business expenses.
Start Your Passive Income in Real Estate
Many people get started in real estate by wholesaling properties. This means that they find a good deal on a property, get a contract on it, then pass that contract on to another buyer and collect a fee for the wholesale. Wholesaling is a fast way to raise cash to build a base for your real estate business.
It’s important to note that wholesaling will take a lot of organization and very strong communication skills. According to experts at DealMachine, “bucketing tasks by labeling them as worth $10, $100, $500, or $5,000,” will make it a lot easier to focus on where you want to put your money. Working with real estate investment software that makes searching for properties easier will also help you maintain focus on the bigger dollar projects. Owning your time and managing your resources well is critical to being an effective wholesaler.
Many people who have the money to invest in real estate don’t have the time to search for properties; many who have time to look at houses don’t have the money to buy right now. A good wholesaler can build relationships with investors and save them time while making money.
The early stages of owning rental property can actually be pretty busy. However, you will learn new things with each house. Over time, a strong stock of homes can lead to wealth with very little daily or even monthly effort on your part. This is the joy of passive income.