One thing that attracts many Woodward Park rental property owners to the single-family rental industry is the ability to earn passive income. It’s a perfect concept: rather than earning a certain number of dollars per hour worked, your cash flow is based on investments that take little to none of your time. On the other hand, not all rental property investments are truly passive. Depending on how you organize your business and ongoing management, there may be a continuing need to be actively involved in your rental properties. The key to passive rental income, then, is to organize your rental properties so that they require very little work to maintain.
There is a bunch of advice out there on how to go about setting up your rental properties to obtain passive income. However, possibly one of the best places to start is to have a clear understanding of what “passive” real estate investing is really about. Technically speaking, passive income is money you make from an investment you are not actively involved in regularly. But owning a rental property isn’t like buying stock or being a silent partner in a business. A better definition of passive income for rental real estate investing is more like an investment that may demand some effort at first to set up but that you can then manage with limited effort.
To create passive income with a rental property, you will first need to put in the time. The part of your investment that will probably take the most commitment would be searching and purchasing your investment property. While there are great opportunities to streamline this process, it is by no means fully automatic. Finding the right deal takes time. Financing a property needs some time. Your property might need some repairs or other work to get it ready for your tenants. Forcing to rush through this process or cut corners is a bad idea and will likely lead to mistakes and financial problems down the road.
But once you have your property ready to go, you can then step back from your investment’s day-to-day management by giving it over to a property manager. This is the key to creating passive income with rental properties. Sometimes, property owners try to save money by accomplishing all of the property maintenance and management tasks themselves.
While doing it that way may save you a few dollars along the way, you will also be actively involved in that property all day, every day. That is not passive income; quite the opposite. To create a truly passive income, you need to trust professionals to handle the more difficult and mundane parts of owning investment properties for you. In this fashion, you can focus your time and energy on maintaining profitability and growing your investment portfolio.
As an investor, it’s ideal to value your time appropriately and spend it on tasks that will help you develop your wealth. This is one of the best reasons to choose rental real estate as an investment strategy. By purchasing properties, you make instant net worth and the potential for real wealth in the future. You are also doing so without the daily struggle of earning money one hour at a time. Investing in single-family properties is one of the best ways to get your money working for you – and not the other way around.
Are you looking for the right property management professionals to help you create passive income from rental properties? Real Property Management Platinum has your solution. Contact us online or give us a call at 559-425-8550
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.