Real estate investing can create a passive stream of income that provides financial freedom for investors and their families.
Many people dream of quitting their 9-5 jobs and being free. Free to spend more time with the family, travel, or pursue their passions. By investing in real estate, that dream can become a reality.
One way to become financially free through real estate is to go out there and accumulate a portfolio of rental properties that produce cash flow every month. Once you have enough rental income to exceed your living expenses you are financially free.
Of course accumulating enough rental income to cover your living expenses takes work, especially if you plan to invest in single family homes. You'll have to source the properties, obtain financing, close on the properties, build a team of contractors and managers, which can be a lot in single family.
That's why I got into multifamily real estate. If you have the resources, you can go and buy one multifamily property that can produce enough income on its own. You can then hire a third party property manager to do the heavy lifting and just oversee him/her, which may only take a few hours a month.
Another option is to build a real estate investing company that does any number of activities including fix & flips, wholesaling, tax deeds, lease options, etc. Then develop systems for each process in the business, hire staff to operate the systems, and a manager to oversee it all.
For those that have a substantial amount of savings or existing assets, creating this stream of income can be achieved by becoming a passive investor. Passive Investors enjoy many of the benefits of investing in real estate without the hassle of playing an active role.
Investing $1,000,000 with a sponsor, as an equity partner, at a conservative return of 8% annually, would yield $80,000 per year in passive income. Also, in many cases the depreciation expense can shelter some, if not all, of that income from being taxed.
Alternatively, you can choose to become a lender by providing a loan to a sponsor at a fixed interest rate that can produce a predictable stream of income. You will also have the security of having the underlying property as collateral should something go wrong.
The Bottom Line
There are many paths to financial freedom through real estate investing. If you have the time and desire to put in the work, becoming an active investor could be the right path for you. Or if you have the resources already, you can invest passively, collect a stream of income, and not deal with the hassles of being active in the business.
The choice is yours!
Babylon Property Group can assist those looking to start or diversify their portfolio by investing in real estate. For more information please contact us by phone at (631) 253-1609 or email at email@example.com