On Monday I attended a book launch for my friend Courtney Carroll. His book, TheFinancial Fitness Blueprint, is a wonderful resource for anybody who wants to increase their financial IQ, explore options to earn extra money through real estate investing and take control of their financial lives.
After the book launch, I got to thinking about the concept of passive income and how to specifically leverage real estate to earn passive income. For me, investing in real estate is a necessary step to leverage your financial freedom. Furthermore, it seems easy enough to do while "doing your day job". Or is it?
Most people assume that real estate investing is entirely passive and no active effort is required. Is the term passive income used too loosely? Is the term used as an excuse not to work or get involved in your investments.
I do not believe that there is such a thing as passive income from real estate. The reality is that you have to stay actively involved in your real estate investments in order to maximise your retuns.
Passive means you can do nothing and make money. If you do nothing eventually things will fall apart. Even if you have hired a property manager to oversee your properties, it is still important to spend a few hours a month reviewing your expenses, building relationships with your tenants and property manager and evaluating how to expand and grow your business. At the end of the day nobody loves your money like you do.
There is no such thing as passive income, but it is possible to build a million dollar real estate portfolio in your spare time.