No topic today is more covered, discussed, explored and fantasized about like Financial Freedom by way of passive income.
I genuinely believe that there are many ways to make this a reality, but the true reality is that passive income is never truly passive, in most cases there is large efforts to startup a venture, periodic check-ins to sustain success, and you should always plan for an exit strategy, especially with real estate.
This is your roadmap to achieving financial freedom and passive income through real estate. We’ll break down everything you need to know, from what it means to be passive, what a co-host is and how it empowers you to become a real estate investor without the usual hassles.
Is real estate still a good investment? In short, yes! In my opinion, real estate is a great investment, but it’s not without risk, such as any other investment strategy. My favorite quote that I got from past host of the Bigger Pockets podcast, Brendan Turner, is “If you take care of your real estate, your real estate will take care of you!”
“The best time to buy real estate was yesterday, the next best time is today” – Every real estate investor has made a version of this quote
Real estate operations isn’t for the faint of heart and definitely is not for everyone, but asking “who can do this for me?” instead of “how can I do this?” can unlock significant potential and free you up to focus on higher-level activities or just keep your focus on the areas that are most important to you. This is why the passive component to investing is so appealing to people. However, there are very few things in life that enable you to be truly passive. This can lead to lack of accountability, missed opportunities, and worse, substantial losses.
Defining Passive – Let’s be honest, we don’t need to be completely absent to consider an investment worthwhile. By definition passive means “acted upon by an external agency; receptive to outside impressions or influences” – In real estate, deploying experts to do the heavy lifting is common practice by experienced and novice investors. However, you should expect to receive updates, engage in discussions around continuous improvement, and ensure alignment with a shared vision.
Co-Hosting – In case you’re unfamiliar with property management, it’s the operations of a facility specific to the needs of that property to provide the investor ideal returns. Co-hosting is exactly that, except for short and medium term rentals. There are tons of Airbnb hosts who don’t manage their own listing. They either hire a management company or a like minded investor who is already a host, to manage their listing. This is the first step to passive investing.
How to Invest Passively – It’s not as simple as buying a house, putting in some stuff and then looking on Indeed for a “cohost” to make your investing dreams come true. This is an investment, it requires due diligence and research.
- First and foremost, you need to set a goal. Ask yourself, what do I want, why real estate, and how is passive investing is going to bring me to my greater goal?
- Next you need a team, commonly referred to as the Core 4 – Agent, lawyer, contractor, and property manager. If you have decided that short or medium term rentals, rentals for less than a year which require more involvement but provide greater returns, will get you to your goal or align with your values, interest, or ethos then you’ll need a co-host. (Sometimes a co-host will double as a property manager, but check with them first, don’t assume)
- Take action! There’s never a perfect time to do anything, but if you’ve done your research, you have a strong team around you, and you’re all working to fulfill a shared vision, all that is left is to take the plunge.
Investing in anything comes with risk and real estate obviously is no different. When I say think who not how, this includes getting started. There is so much great content out there to improve your knowledge around investing in real estate to ensure you protect your investment and bring in those returns. If you don’t have the interest to take that approach, please feel free to reach out – I’ll share any and all knowledge I have to support you in this adventure!