Is a PASSIVE Property Income ever really achievable with property investing? To be honest... I'm not convinced, however today, let me share with you 7 different ways you can get investment property pretty close to becoming a TRULY passive property income.
DOWNLOAD EVERY PROPERTY TOOL I USE (FOR choice of strategy is going to play a huge part in how close you get to creating a passive income. Some strategies, like flipping properties for example, are obviously going to eat up big lumps of your time compared to say, investing in commercial. Especially if you're managing the properties yourself. However, this may be fine in the early days - if you're building your cash reserves, because ultimately you probably will be buying more passive types of property. If you refurbish a place, virtually back to the bare walls, replacing everything in your path, which tends to be what I do, the amount of ongoing maintenance or problems that you're going to have will be very little indeed. And this is definitely in tune with creating more of a passive income.
Demand comes next. Let's be clear, if there's an over supply of accommodation in your area, there's a good chance you'll be spending too much of your time filling your properties. That's not passive. In fact if there is an over supply, your tenants are going to keep seeing better places to live and that means more tenant churn. I've just copyrighted that phrase. And therefore more demand on your time. So the point here is pretty obviously, invest in areas of strong rental demand.
Speaking of tenants, you got to look after them. You've got to keep them happy. If you give your tenants a wonderful place to live, somewhere they love spending time, they won't be looking around as they approach the end of their six month tenancy. A happy tenant will stay with you for the long term and shouldn't give you any grief. And of course, that's more in keeping with a passive income.
One other thing that I've noticed, and I'd appreciate any comment or feedback on this, and it's just an observation. Whilst most of my tenants are young professionals, some of my more mature tenants tend to stay for the longer term and certainly give me less trouble I've noticed. Which means I've little or nothing to do with them. They just sort of stay there and pay the rent.
A competent letting agent is your biggest ally. And let's be honest, if you're looking for a really passive income, you shouldn't really be dealing with tenants at all. If you are managing all of your properties, you could argue that you're going to make more money. I completely get that, but this can be at the expense of your time. And this video is all about creating a passive income. If you're looking for that passive income, your competent agent can largely give you this. However, can I suggest there's an argument for buying all of your properties in one geographical location so you can negotiate hard on the fees. I did a short little video on how to find your investing area and I'll put a link to it in the box below.
You've got to systemize everything. Obviously this is a huge subject and I've got other videos coming out regarding this, but suffice to say, the better your systems, the more passive your income. I bore everyone with my love of Trello, and if you haven't heard of it before, I'll link to a video. But there are other great systemizing Apps out there. In fact, if you have a neat way you note down your systems, that you then outsource. So I'm talking about, do this, followed by this, followed by this, followed by this, I'd really appreciate if you could take a moment to comment in the box below.
And lastly, once you've worked out how many properties you need to be financial free i.e. bringing in more income than you're spending, buy one more. The cash flow from this one can pay for all of your management across your entire portfolio, meaning that you can be pretty much hands off as the agent should be taking care of everything. If you found this video helpful, again I'd really appreciate if you could take a moment to subscribe by clicking here and I've got a couple of other videos here that you may well find helpful. My name is Tony Law from Your First Four Houses, and I look forward to seeing you in the next one. Thank you.
TRELLO - THE APP I CAN'T LIVE DEMAND IN YOUR INVESTING SUBSCRIBE ON LIKE MY FACEBOOK market