Earning Passive Income Through Real Estate Investment

I don't own a house, I live in a rented house. I have rented two rooms. There are 6 renters in the house. The landlord collects rent and makes passive income. This is one of the best ways to make money because renting property brings you cash flow. When you are collecting rent, you will not be affected by the property prices as you are not selling the property, you can collect the rent even when the property market goes down. If I had money, I would have certainly invested in real estate property and earned passive income. However, I don't have money to buy real estate property. Well, I can buy with a loan but I would need 20-30 percent down paying, which is already a lot of money. Even if I managed to make a down payment, and buy a property I might not be able to collect enough rent to pay a mortgage.

Potential to Earn Passive Income Through Real Estate

If you are a property owner, you can rent out your property and earn passive income. There is small maintenance fees associated with real estate, however, the maintenance is easily covered by the rents you collect. Another method of making passive income through real estate is flipping properties. You will have to buy properties, add value to the property and then sell it for a higher price. Well, in most cases you don't even have to add value to the property you are flipping.

Real estate is one of the best investments that will bring you cash flow. Cash flow is very important to improve your finances. Earning passive income from real estate investment means you will be collecting rent from your properties. When you are collecting rent every month, there is a cash flow. Since you are only collecting rent, you don't make a loss from your investment even when the property price goes down. However, the problem with real estate is you need a lot of money. In order to collect rent, your property needs to be in a prime location (in a location where people and businesses are willing to rent out properties). The properties in the prime locations cost a lot of money and you need a lot of money to invest in properties. Financing your property through a loan might be an answer.

Real estate market is one of the best method to make passive income. You buy a house and put it on rent, and you collect money every month without any work. The only expenses you incur is pay taxes and some minor maintenance. However, this method is available only to those who have a lot of money to invest. You need to own a property in a place where you get a lot of renters and you will have to spend hundreds of thousands dollars to buy property in prime location.

Real Estate is the Best Investment For Cash Flow

If you go by Robert Kiyosaki, the author of Rich Dad Poor Dad, you should invest in the assets that bring you cash flow. If you invest in gold, it will not bring you cash flow, you can convert it into cash only when you sell it. However, if you invest on stocks, you can get dividends. If you invest in real estate, you can earn rental income, which is also cashflow. Considered one of the best investment markets, real estate offers the advantage of generating cash flow even during market downturns. You might not be able to sell properties when the market is down but you can still collect rental income. However, substantial capital is required to enter the real estate market.

Real Estate is considered one of the safest investments because it brings cash flow no matter the economic situation. When the market is down, the value of all investments, stock, crypto, equity, and also real estate will go down, nevertheless, your real estate property will continue to provide you income through rent. When the market is down, your stocks might not give you the same dividends as when the market was high, however, even during a bad economic situation, you will continue to collect rents from your property and your real estate investment will continue to bring you money. If you are dealing with buying and selling property, you might make a loss when you sell when the prices of the housing market have gone down, however, if you hold selling until the market improves, there will be no losses at all. The key to making money through investment is holding until the market improves.

Tips to Protect Your Cash Flow in Real Estate

Purchasing the property is only half the battle. If you mismanaged the property, you will not get the return you want. Here are tips critical to your cash flow.

Run credit and background check of your tenant: If you don’t check credit to income ration of your tenant you might have a defaulting tenant.

Verify income source of your tenant: You can’t take a tenant just because he is paying you 1-2 months rents in advance. You need to verify their income so that they never delay their rents. Make sure they have some kind of stable income.

Charge an application fees: While asking to pay application fees sound little crazy, it will help you as a landlord to spend some time doing background check and verifying income source. If they don’t pass these checks, you will not be wasting your time (because you received fees). This provision will also ensure that you get genuine tenant (because they are surely that they will pass background checks.

Real Estate Investment Strategies

Do you invest in real estate? Have you invested in real estate? What is your favourite real estate investment strategy?

In my opinion, buying a property and renting it out to generate income from your investment is the best strategy to make profits from real estate. Renting is generally not affected by recession or even inflation. If you are buying and selling properties, you might be affected by recession and inflation, but renting is not usually affected.

If you have taken loan to buy property, monthly rent you collect can be used for bank loan repayments. This business model remains recession-proof as people continue to rent properties despite economic fluctuations.

Choose Legitimate Properties While Investing in Real Estate

A lot of people invest in disputed properties because they can get it for cheaper price. This is not a safe practice as you might not only land into legal battles but might also lose your entire investment. Investing in disputed or undocumented properties can lead to scams and financial loss. Sometimes you might end up investing in disputed properties unknowingly. That’s why you need to take careful consideration and do a lot of research while investing in real estate investment.

You also need to make sure the developer is a genuine developer and has good reputation. Sometimes developer might never handover the property you have invested in.

What Should You Consider While Investing in Real Estate

Real estate is one of the safest investments. But it is not completely risk free. There are a lot of things you should consider before investing in real estate.

Don't go for expensive properties, instead, aim for cheaper ones. Why? Well, expensive properties can cost a lot to maintain, it's often hard to find people to rent them out, and it is difficult to sell them.

When you're investing in real estate, focus on properties that have value and can make you money. Forget about falling for beautiful houses; look for ones that can get renters and can be sold easily, thus bringing you cash flow.

How to Flip House and Make Money

Flipping house means you buy houses in a hope to sell them and make money. This is one of the most popular methods to make a lot of money from the real estate in a short time. If you want to use this method, you will have to remember a couple of things. Instead of buying expensive properties, buy the ones that are cheaper. If you are into flipping houses for cash, buying cheap, run-down houses, fixing them up, and then selling them can make you a lot of money. So, remember: when it comes to real estate, it's not about the looks, it's about the value. Buying houses that might not look great but are in good locations can also help you sell your properties for a good price.

Conclusion: Reasons Why You Need to Invest in Property Market

There are two major benefits of owning a rental property, one, you will have a house to live thus saving money on rent, and two, you will have a property that you can rent out and make money from rent. When you live in your own house, your cost of living will drastically reduce, instead of paying rent, you can start investing money. Likewise, when you rent out your property, you will generate income without having to work for it. rental income is completely passive.

Real estate is one of the least risky investment areas. Unlike stock market where price fluctuates frequently, real estate price do not frequently move. Unlike crypto prices that is very volatile, property price is not volatile. Real estate is better than other least risk assets like mutual funds and ETFs because real estate bring more profit compared to these markets. The only major drawback of real estate investment is you need a lot of money and you need to be financially capable to hold your investment