Let’s be honest – all of us would love to bring in a bit of extra money from time to time, right? There’s nothing better than being able to earn some money in addition to your day job. Apart from boosting net worth, this will also give you financial security, which is something all of us want. But if you’ve already got a demanding day job – you may not be up for doing a lot of additional work. And that’s where passive income comes in, especially if you’ve got a property you can rent out. That’s why I’ll give you a simplified rundown of passive income basics right here!
Passive Income And Rental Properties
Okay, so let’s talk about passive income. Just what is this in the first place? Well, the definition of ‘passive income’ is basically that it’s any earnings you make in a way that doesn’t take you a lot of effort to attain. As the word ‘passive’ implies, you’re not working for this type of income on a daily basis yourself. For example, this could mean investing your money into bonds, stocks, or earning from a rental property.
Obviously, having some passive income is awesome. With it, you can give your retirement savings the boost you may need to retire early, or simply build your wealth. Naturally, there are many ways you can invest in real estate – but today, in the context of passive income, we’ll take a look at rental properties.
Think about a very basic fact about life for a second – people move around all the time. For some reason or another, people use one of the many different moving options out there in order to relocate to a new home. But realistically, not everyone has the financial chops needed to buy a new household of their own. In that situation, many people resort to renting. And that’s where you come in with your rental property! At the same time, you solve someone’s household problem, while also making some long-term passive income. It’s truly a win-win situation.
Finding Expert Real Estate Agents
When it comes to rental real estate, one thing is certain – you can’t afford to make any beginners’ mistakes. After all, any sort of investment in real estate is a sizable one, especially for a high middle-class budget. And in the very beginning, you’ll definitely need to put some money into your rental property, if you want to earn a passive income later on. Sure, it won’t require any daily work once you’ve got a steady tenant – and you’ll get a nice monthly income for your initial effort!
But before you do anything or make an investment, find a real estate agent that is local and knows NYC, someone like Imma, Broker Owner of Tyler Vincent Real Estate Inc. You don’t want to entrust your real estate investment to anyone – you need a combination of experience and knowledge-ability that has the highest possible odds of yielding results.
Where To Buy
So, you’ve decided to invest in a rental property, in order to start making some passive income. But with that in mind, you should consider which area would bring you the highest profits. Generally, the rule of thumb is that you want to have a look in areas that have great schools. Buying a rental home in such an area may be more expensive, but it will also give you a better return on your investment than a condo or an apartment. Make sure you purchase only in a neighborhood where you know that prices have been rising for years.
Plus, such an area is more likely to get you the tenants you want, responsible renters that won’t be unpredictable in regard to payments, and won’t damage the place in any way. Also, keep an eye out for rentals that are near major highways or public transportation; these are usually more popular because of the chance for an easy commute.
If you’re making your first investment in real estate, you want to make sure that you’ll buy local – a property that’s nearby, so you can check on it from time to time. Conversely, your first rental being an out-of-state property would be a bad idea, regardless of the costs.
What to Buy
When people ask about renting and buying, I tend to tell them: firstly, it all depends on what you’re planning on doing with the rental. If you want to have regular renters for a prolonged period of time, you want to invest in an apartment. On the other hand, if you plan on selling your rental in a couple of years’ time for a neat profit – a house is a better idea.
/caption: If you’re renting, get a property that doesn’t require extensive renovations! /alt: A front door with a key in the lock.
If you’re planning on selling the property pretty soon after you purchase and give it some slight renovations, take a look at foreclosures. These are an excellent way to land an agreeable deal on an under priced property. On the other hand, when it comes to rental properties – don’t settle for fixer-uppers. You want to rent it out as soon as possible, instead of burying yourself in endless renovations and additional costs. Get something that’s basically move-in ready, if you plan on renting it out.
Finding Tenants
For those worried about finding the right tenants – know that it’s hugely important to set the right price for a property. You’d do best to consult with an experienced real estate agent on how much you’d be wise to charge for the property. Though, make sure that the rent covers your overhead on the property while bringing in some passive income as well. After all, every property means dealing with homeowner’s insurance, maintenance, HOA fees, etc. Take all of that into account while you set your rent! Hire a professional like Imma, who will screen the top qualified candidates for your property. It is all about damage control. Don’t just run a random ad, everyone has to prove their income and credit worthiness or they just do not cut the mustard.
Remember this is YOUR wealth portfolio we are building, not a not for profit. In some state L and T Courts are stacked against the landlord .. therefore you must avoid courts at all costs.
Remember if you do not watch your money, someone else will be.
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