The way to achieve your real estate investment business goals is by being very clear what your goals are and having a plan to attain them. For many people, the primary real estate investment business goal is creating a passive and massive income stream.
Passive income is having monthly checks come into your business while you perform very little work other than collecting the cash. Today's marketplace is a once in a lifetime opportunity to accomplish exactly that.
The good news is that these difficult economic times are great for your real estate investment business. While it's still possible for you to rehab and flip properties, it's not the ideal time. Instead, it's a time for you to buy and hold properties that deliver monthly rental checks.
The other good news is this strategy works whether your investment business specializes in residential or commercial properties. While it will work for those owning and renting individual houses, it works best for those with duplexes, triplexes, and other multifamily properties, including small to medium apartment buildings.
You might be saying to yourself, but having tenants is a lot of work. Telephone calls in the middle of the night to unclog toilets isn't exactly passive income. You'd be right about that. But it's today's unprecedented real estate market that changes the rules to make it all possible.
It's about building and executing a business plan tailored to this market. Because rents are up (and going higher) and the costs to purchase properties is still reasonable (and will stay reasonable for the foreseeable future), now is the perfect time to be the owner of rental properties but not the landlord.
The combination of discounted purchase prices and high rental returns makes it possible to hire a property management company to take those late night calls from tenants and handle all of the day-to-day issues that go along with being a landlord.
Typically, management companies collect a percentage of the rents. In the range of 6% to 10%. What your investment business needs to be doing is factoring in this expense during the due diligence process of considering a new purchase. You only want to buy properties with positive cash flow when a management company is included.
It's that easy. This is the perfect time to factor in the cost of hiring a property management company so that your real estate investment business generates passive incomes for many years to come.
Author bio: Brian Kline has
been investing in real estate for more than 30 years and writing about real
estate investing for seven years. He also draws upon 25 plus years of business
experience including 12 years as a manager at Boeing Aircraft Company. Brian
currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from
a national forest in the Olympic Mountains with the Pacific Ocean a couple of
miles in the opposite direction