Is real estate investing the path to riches? Not really. But it could help you build up a source of passive income. Provided you pull it off correctly.
You see, investing in real estate is trickier than it seems. Across the world, people invest in properties before they lay down money anywhere else. There’s a good chance you already know someone with a vast property portfolio. That’s because it’s one of the easiest investments to make and is generally considered a lot less volatile than say equity or bonds.
You may have wondered how much you could earn with a few properties of your own. If you walked into the local bank and signed yourself up for a massive mortgage, you could probably start buying tomorrow. Perhaps villas in the Mediterranean or student homes in a small college town that are rented out constantly for a healthy stream of income.
Here’s everything you need to know about creating passive income from real estate investments.
Define the Number
If you want to create a stream of passive income you will need to seek out yield. With real estate that usually means rents. Rental yield varies throughout the country, but most buy-to-let entrepreneurs seek yields that can beat the bank’s mortgage rate and the fixed savings rate. After all, if you’re going to manage a property rather than put money in the bank, you deserve to be compensated for your extra effort. So start by looking at locations that offer the best and most stable rental yield.
Keep the costs low
There’s a lot of costs involved in the traditional buy-and-hold investment strategy. Properties need maintenance and selling them is usually a slow and expensive process. Services like Quick Move Now have made it easier to sell properties quickly while cutting costs. However, costs such as property insurance, council taxes and regular repairs are simply unavoidable if you buy and rent out a property. Try to get some repairs done yourself and save money. Avoid property brokers and use online platforms to rent or sell the property. When you’re trying to create passive income from real estate, suppressing these costs is absolutely essential.
Keep Your Options Open
Buying a property directly isn’t the only way to get exposure to real estate. Real Estate Investment Trusts or REITs have sprung up in recent years that make the process a lot more streamlined for average investors. The REIT is a trust that holds a large number of properties and pays back a dividend every quarter from the rents gathered.
It is possible to create a healthy and stable stream of regular income from real estate. But like any other investment it requires patience, research and a little experience to successfully achieve the yield you need. Unlike other investments, property could be quite expensive to maintain so try to cut costs and boost income as much as you can. Real estate could be a vital part of a portfolio that promises financial freedom.
It’s not an easy way to make money, but if you stick with it, it can definitely help you become financially independent!
In my opinion, real estate is one really “recession proof” industry over time. The property values go up over time and if you have the capability to withstand the initial roller coasters, then yes….real estate investing can make someone financiall independent
This is helpful! I really want to invest in real estate and I know it’s a cut-throat business. It’s risky but it’s surely one way to have a good cash flow.
I’ve had success in investing in condos in Chicago that have grown substantially in value. It’s still a solid investment strategy. Maintaining multiple properties for passive income streams requires a lot of individual repair and maintenance work but can be done by the right person.
Great article! Many people think it is quick and easy.. Real Estate Investing is a great way to diversify, but just like most things, it takes work!
Great post, Pauline! I have a couple guys at my work who got the real estate bug and have given up on all retirement accounts to focus on it. While it’s great that they’re going at it and doing something good, I just see the missed money slipping through their fingers… especially since we have a company match of about 35% on every dollar invested with no max.
Ofcourse yes. One of the safest and less trouble free way to invest is on Real Estate. Buy and Selling a home is now very easy. Its takes time and effort to get the right and desired one. Buy once invested its a long term bet for all your financial worries. Wonderful article with clear insights.
At what point should someone began investing in real estate?
Meaning, should we began investing when the housing market is good/bad? Do we began investing before we retire or after we retire?
Basically, under what conditions make it the best time to began the renting business?
Every state has its own set of real estate laws. For the most part, a real estate agent’s help is not legally required, though agents can help you with tasks that border on legal ones, such as preparing a home purchase contract. In some states, however, only a lawyer is allowed to prepare the home purchase documents, perform a title search, and close the deal.
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Great information in this article do you have any advice on investing using a self directed Ira
Real Estate investment is one of the most profitable ways to invest, and for first time investors who do not want to risk large amount of funds can REIT, it is really one of the best ways for investment for beginners
I agree with it. Real estate is a great source of making money if you are investing your money in a good property then it will help you in your future. I bought a house in one of the posh area in Cypress, TX and now I give it on lease and earning a lot through this property. such a nice post!
Hello!
Great article with some great content one investment strategy i am seeing more frequently in seniors is downsizing into a duplex and renting the other side for the rental income
This is some really good information about probate attorneys. My grandmother needs to start getting her estate planning set up. I liked that you pointed out that it would be smart for her to consider starting a trust. It does seem like we should talk to a professional about what the next step is. Real estate
Hello, I agree with it. Real estate is a great source of making money if you are investing your money in a good property then it will help you in your future. I bought a house in one of the posh area in Cypress, TX and now I give it on lease and earning a lot through this property. such a nice post!
I would be a Real Estate investor . After my 4 years in the Navy as a cook , I went to the Culinary Institute of America to learn the proper way to cook . Eventually after 5 years working in the finest restaurants and Clubs in Palm Beach and New York City , I bought 2 bankrupt restaurants and eventually had 5 within 15 years .
Hello, Real Estate investment is one of the most profitable ways to invest, and for first-time investors who do not want to risk a large number of funds can REIT, it is really one of the best ways for investment for beginners.Sell your home fast
Financial advisors are a great option, though one should probably accumulate a bit of assets before finding one to make it worth while. At the beginning, focusing on living below your means is still much more effective then trying to increase your investment gains.
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Hello, Real estate can have a devastating effect just like any other investments. Natural disasters like fire and hurricanes can make a serious dent with your asset, while those who bought a house in Detroit is probably wondering what happened to their supposedly “safe investment”.
The key is to know your investments, since no one particular one is worst than another. For most people, real estate is easier to understand because they see the asset and can better foresee risks. For others, stocks are a better way to go because information about it is actually more readily available.Real Estate Text Marketing
If she’s new to investing, she can look into hiring a financial advisor. But interview a few before you decide & get references. I wouldn’t suggest anyone investing in the market if they don’t know what they’re doing. You can lose everything if you don’t diversity your assets.avoid foreclosure
Financial advisors are a great option, though one should probably accumulate a bit of assets before finding one to make it worth while. At the beginning, focusing on living below your means is still much more effective then trying to increase your investment gains.avoid foreclosure
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Great information. It takes money to make money. Investing can be a risky business, just make sure you know what you are doing and research it before hand.Belize real estate
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Yes. Please let’s address our property tax issue. Every person I know in my age group plans on exiting the state because of their yearly property tax burden. It’s impossible to retire here in the homes we worked so hard to own. This is so sad and a serious issue that is not receiving any real attention. New Jersey is viewed as a greed state that will implode one day.Kampong Java
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