The Easiest Way to Earn Passive Income

Some may argue that nothing worthwhile comes easy. While this may be true, there’s still a wealth of products that claim how to get rich quickly.

Any successful commercial investor will tell you that getting rich quickly could never be further from the truth. What is legitimate however, is that rental properties are far more stable and progressive than other ventures or investments. While markets rock and shake through varied fiscal crises, everyone, despite their income levels—will always need a home. Despite someone’s living situation, whether it’s a single individual who values freedom and alone time, or multi-generation families who make ends meet collectively, one of the universal need for humans – is shelter.

As such, commercial investors are presenting a product that’s in-demand. Some products can additionally position themselves better than others, in terms of the value or lifestyle they provide. When it comes to real estate, value-added amenities are tools that can increase the total revenue made each year.

Many people start small, and then build up until a diverse portfolio is in place. Even a single family home can provide passive income as a stepping stone for buying more property – if it’s managed properly.

How Property Investors Receive Passive Income

Property investors receive passive income by collecting a lease payment each month. If the investor is paying a mortgage on the property, the home note and other expenses are deducted. What’s left from the payment is the investor’s to keep.

An investor who has paid the full price on a property out-of-pocket will receive more cash flow for the obvious reasons. However, not all beginner investors have the capital to do so. Not having all capital shouldn’t be a discouragement however, as many successful property entrepreneurs have utilized financing, while still retaining a sizable income. Over the course of 30 years or less, most mortgages would have been paid off in full, and the owners can then enjoy a retirement of passive income.

If you’re new to investing, real estate is one of the most successful paths to wealth. Just ask some of the wealthiest citizens out there.

Start small if you’re new, and also use the help of an expert, in order to avoid mistakes. Talk to other real estate investors, the successful ones that is. It’s wise to read different books, points of views, even listening to podcasts from experts like Jason Hartman on a drive home, can bulk up your intellectual muscles when it comes to savvy real estate investment. (Top image: Flickr |manyhighways)

The Commercial Investing Center Team


The Benefits of Investing in Commercial Real Estate

As a commercial investor, there are many perks that come with the job.

We’ll discuss a few in this post:

Safety Net – Since many commercial properties offer the opportunity to lease more than one units at a time, the chances of entire vacancy are slim. Compare this scenario to renting a single-family home. If the tenant defaults, the cash flow is dried up by 100%. On the other hand, only a percentage of cash flow will be eliminated when this happens for one or more units in a commercial property.

Think of the scenario as how most people perceive employment. With shaky levels of job security in tow, many people are just a pay check away from financial catastrophe. However, if there are other revenues of income set up prior to this, being laid off will be non-issue for some time. In fact, having another income stream is the main reason investors take on commercial real estate.

Higher Payouts – More units rented mean more cash flow for owners.

Stability – The average lease term for commercial spaces is longer than residential units. Some can even extend close to ten years. Small and large startups have one need in common: and that’s a central place to conduct business. As such, many will be reluctant to move, having done business in the same place for years.

Subsidized Taxes – Depending on the lease drafted by a lawyer, many commercial owners have the option to include property taxes as part of the renter’s payment commitment. This isn’t uncommon at all.

Despite these benefits, commercial investors should still be careful. Owning and managing commercial property doesn’t obliterate all risks of investing. Mismanagement, failure to keep tabs, not choosing the right property, and more can all snowball into a disaster.

Check out Jason Hartman’s tips for investing wisely. Prices are usually calculated based on square footage, wherein these can be estimated through market comparisons. For investors who choose the path of commercial real estate, networking is key.

Maintenance is also essential, even during vacancies. Be sure to dot your Is and cross all Ts in a commercial lease. This is recommended to prevent liability in case of accidents, defaults or other incidences – which will be discussed in future posts.

The startup cost for investing in commercial real estate will certainly be higher than a single family home. However, the rewards are well worth the efforts exerted during the initial stages of investing. (Top image: Flickr | Mrshife)

The Commercial Investing Center Team