First, let’s define what Passive Investing is…
Passive Real Estate Investing is a way for investors to get involved in the real estate market without having to actively take a role in the daily management of a property. The keyword here is passive. This is a great way to avoid stress, generate a regular income, and live life on your own terms.
Investing in real estate can be a great long-term strategy to build wealth, own good assets, and protect your money from inflation. There are many forms and strategies real estate investors can choose, from commercial real estate, straight rentals, student rentals, to flipping homes.
Each strategy has its own pros and cons, and not every strategy is going to fit everyone’s short-term objectives and long-term goals. While we’re big believers in the value of hard work and dealing with hard times for a greater reward, that’s not for everyone, and that’s okay!
Passive real estate investing is a way that investors who see the benefit of owning real estate can do so without the time and commitment often involved in conventional real estate investing strategies.
There are various ways to make passive income in real estate. It’s about what kind of passive real estate investing strategy works for you and your long-term goals. There’s something for everyone! Either way, the overall goal in passive income is to help you live the life you want to live without having to worry about the fine details.
The best way to generate passive real estate investing income is to invest in long term rentals, and we mean multiple rentals. This way there is always a stream of income and you aren’t only relying on one tenant for cash flow.
There are two ways you can easily own rental properties, and still maintain a passive level of involvement.
The first is to hire someone/multiple people to take care of the work for you. There are handymen who can take care of the upkeep, lawn care and snow removal companies, or you can hire a property management company to really cover your bases. You can find property managers who will fill the properties with tenants, collect rent, deal with evictions, and all of the other “dirty work” that you don’t want to handle.
By having a good property management team, they will be able to ensure you have quality tenants at all times and save you the pain of searching for new tenants every time one decides to leave.
The second option for owning rental property in a passive role is to form a Joint Venture (JV) agreement with another investor.
Maybe you have the capital needed to invest, and the other investor has the time and experience to manage the property. There are many forms of JV agreements, and while it’s important to have a legal agreement in place that clearly defines roles and expectations of both parties, it can be mutually beneficial for all parties involved.
Real Estate Investment Trusts (REITs) are one of the more common forms of passive real estate investing. It allows you to put money into real estate without ever going out and buying a property. REITs generally own or control income-producing commercial real estate. You invest in the REIT, similar to investing in stocks or mutual funds. REITs generally own Retail, Residential, Office, or Mortgages. Each has its one benefits and risks, so it’s a good idea to do your homework and consult an expert in the field if you’re looking at this form of passive real estate investing.
Those who are knowledgeable about the market: To generate passive real estate investing income, it is important to know what areas are up and coming, as buying a property right before it booms will not only help your monthly cash flow but also your long term property value.
Those who know how to build a successful and trustworthy team: To get involved in passive real estate investing, you need to have people that support you and have your best interest at heart. Whether it’s a lawyer, broker or property manager, work with people and professionals you have experience with, it will make it easier for you to stand back and let the magic happen.
Those who understand when a problem is not part of their expertise, and seek help from a professional to get the job done!: Be careful that you don’t consider yourself a jack of all trades (a lot of the time they’re a master of none!). Know where it could be helpful to you in the sake of time and money to get help from a professional.
Is there a network to help me generate passive real estate?
Here are some choices for you:
CHOICE #1: You can learn more about how to create income for life by clicking here and filling out the form at the bottom of the page. Our free book will be emailed over to you right away.
CHOICE #2: If you’re interested in learning how to get more involved in real estate, you can come visit us in-person at our next FREE Real Estate Training class. We take reservations on a first come first served basis, to get more details, click here. Act fast, we have limited seating available!