I have a dream of retiring in my 50’s, even sooner if I can somehow figure out a way. This is probably why I work a day job, a side hustle, and I am constantly looking for passive income streams. A passive income stream is where you essentially don’t have to do anything to earn money, it just sort of makes itself. Allow me to illustrate. Have you ever noticed how blogs and websites have all those nifty Google ads up along the borders of their websites? If you click on them they take you to an online store where you purchase something. Once you make that purchase the site owner from which you came is automatically credited with some portion of that sale. Pretty cool, huh? We all only have so much time in a day, so if your ultimate goal is early retirement than it’s absolutely vital that you figure out a passive income stream. They don’t all have to be website related, in fact, real estate investments can be an excellent income stream that earns money all on its own.
Finding a good investment property requires a knowledgeable real estate agent that knows the local area. You don’t want a realtor that doesn’t know the rental potential of a property, otherwise you might overpay for an area that holds very little return. For instance, college campuses are a great place to snag investment properties if possible. Upper classmen are always looking for walkable housing that is just off campus, and either they or their parents are typically willing to a premium for it.
You have no idea how long it might take to flip or rent a house. Complete a NPBS mortgage comparison for example, and you can feel comfortable knowing you have a locked in rate and available cash flow if needed. The last you want to do is pay cash for one property and tie up all your capital, it will leave you unable to invest in other potential deals going forward.
Finding a reputable and effective property management company is key as well, especially if you are investing in an area that you do not live. A good property management company serves a collection agency, they deal with all the maintenance issues and hiring contractors, and even field administrative calls on the property. They typically take about 1/12 of your rental income, but at long as they are effective this can be a small price to pay for avoid the hassle that goes along with managing your own property.