Can I Make Passive Income with Rental Properties? 4 Tips for Success
You can gain passive income in a variety of ways that are not dependent on your principal employment. This type of income can help to ensure you enjoy a comfortable retirement or stay afloat in the event of an economic downturn.
There are several ways to make passive income: stocks, real estate, and multi-level marketing, among many others. Some passive income generators are more lucrative, riskier, or require more start-up funds than others.
While no investment is ever 100% guaranteed, there is one way to make passive income that generally offers better long-term returns than others: real estate.
Why Use Real Estate for Passive Income?
Traditionally, real estate has garnered higher returns on average than other investment opportunities for several reasons. Landlords can benefit from the appreciation of their investments, as well as the ongoing rental income. Using real estate for passive income also serves as a hedge against inflation.
You can participate in passive real estate investing in several different ways, such as purchasing stock in real estate-related businesses, investing in real estate investment trusts (REITs), or making direct investments in real estate deals.
However, you can also purchase properties that are move-in ready and rent them out to earn passive income. This can be one of the most lucrative ways to earn passive income if done right.
4 Ways to Find the Right Turnkey Properties in Kansas City
There are four big tips you should follow to tap into the treasures of passive income rental properties:
- Pay attention to housing market trends
- Choose the right capital sources
- Pick your strategy
- Consider professional help
These are the top four recommendations. There are dozens of others to take into consideration. It’s also important to keep in mind that, while there are plenty of opportunities to create passive income on a rental property, investors can’t ignore the importance of doing their own due diligence to make informed, educated, and profitable decisions.
Pay Attention to Housing Market Trends
Keep an eye on the Missouri real estate market in the area in which you are interested. Certain market segments usually perform better than others, especially during broad economic shifts or market volatility, such as a recession or a pandemic.
For example, the multifamily sector might sometimes be more resilient during a pandemic than properties like office buildings. These sectors would come with less risk and better returns to keep your passive income steady, even during a downturn.
Choose the Right Capital Sources
The obvious choice for financing Missouri real estate purchases is taking out a loan; however, there are benefits to tapping into other potential resources, as well. For example, you might consider leveraging your retirement assets in order to boost the rental income you’ll receive. Borrowing from your own 401k could be an option that could allow you to avoid taking on the debt of a loan and having interest payments, as well.
Pick Your Strategy
The best strategy for you isn’t going to be the same strategy your pal used to invest in passive income rental properties. It’s not a one-size-fits-all game plan. Really think through what exactly it is that you want from your real estate endeavors.
Are you interested in owning a multifamily property, or would you prefer a single-family home to rent out for income? Do you want to purchase commercial real estate and rent it out to businesses? Considering buying an office building to rent out to one company? There is no single correct answer. It depends on the investor.
Consider Professional Help
There is a lot to consider, tend to, and account for at any given time when it comes to buying passive income rental properties. It can seem overwhelming, especially for first-time real estate investors.
Whether it’s getting tax information all in order when it’s due, keeping track of accounting and financial matters, repairing and updating a property, managing a property, collecting rent payments, or even finding the right turnkey property, there is help out there for it all.
Consider turning to a Kansas City turnkey rental company to take some of the load off your shoulders. You want to ensure that you purchase the best property that suits your budget and goals, and a turnkey rental company can do exactly that.
In addition, these companies also have connections to other industry professionals that you will likely need to retain at one point or another. These might include accountants, tax professionals, property managers, electricians, maintenance crews, and more.
Real Deal Properties is a Kansas City turnkey rental company that leverages the experience of its team to find and bring clients outstanding properties that are rent-ready.
Real Deal Properties knows how to buy and sell turnkey properties at the best prices, as well. Reach out to us today.