Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

Passive Income Investing For Part-Timers

Written by Than Merrill

Passive income investing, more commonly referred to as the definitive buy and hold strategy, has made its way to the pinnacle of retirement plans. Few investment vehicles, for that matter, can match the cash flow potential of a well-devised passive income investing portfolio. What’s more, as the name suggests, passive income investing requires little to no effort to maintain. What more can you ask for?

To get to that point, however, you will have to put in a lot of time and effort up front if you want your passive income ideas to pay off. Only once you have laid the ground work for a cash flowing passive income investing portfolio can you rest assured your golden years will be supplemented accordingly. It’s true: passive income investing is a great retirement vehicle. You just need to know how to get to the point in which your money works for you, not the other way around. And for what it’s worth, it’s entirely possible to get to that point working as a part-time passive income investor.

The amount of time you dedicate to solidifying a sound passive income investing strategy is entirely up to you. While some investors have found they are better off making a full time job out of it, there is no prerequisite for the amount of time you must actively spend. When all is said and done, it’s not the amount of time you dedicate to passive income investing that will make you a success, but rather how productive you are with the time that you do have.

It’s entirely possible to scale a rental property portfolio on a part-time basis. In fact, I maintain that a passive income investing strategy is a great option for part-time investors to consider. When it comes down to it, investing in buy and hold properties on a part-time basis has more to do with maximizing your efficiency than anything else.

If you are interested in passive income investing but want to maintain your nine-to-five, there are a few things that warrant your consideration.

The Keys To Part-Time Passive Income Investing

Buy and hold investing

There is no reason you can’t draft a part-time passive income investing strategy that is perfectly capable of generating positive cash flow. Remember, it’s not about how much time you have, but rather how you spend it.

Regardless of whether or not you are interested in a part-time or full-time gig, you have to take it seriously; there is no other option. You have to treat passive income investing like the business it is. And not unlike a business, your part-time passive income investing strategy needs to be efficient. Without efficiency on your side, managing a rental portfolio on a part-time basis will be difficult. Let’s take a look at how you can maximize efficiency in your own passive income investing business:

Property Management

Nothing, as far as I am concerned, will contribute to productivity and efficiency more so than a great property management company. As the name suggests, a property management company does just that: manage properties. Provided you hire a good property manager, they will take the stress out of owning a rental property and improve its efficiency for a relatively minimal fee; they take a percentage of the rent collected. It’s worth noting, however, that the price you pay for a good property manager is an investment in and of itself. There is no reason to believe third-party management won’t increase profit potential, reduce vacancies, guarantee rents on time and even free up your time to pursue more investment opportunities. As a part-time passive income investor, there is really no other option. Not only will a property management company do most of the heavy lifting, they will probably operate on a higher level than you could ever hope to — effectively improving your bottomline for a minimal fee. What’s more, there is no better way to scale your business. The more rental properties you accumulate, the more valuable a property management company becomes.

Quality Tenants

If you are interested in part-time passive income investing, it may be time to start looking at the one thing that is more important than yourself or your property: your tenants. After all, it’s those that will be living in the property who will account for your cash flow; no tenants, no profits. So while you would love to think the world revolves around you and your property, don’t forget that even the best rental properties are in trouble without tenants. Having said that, not just any tenant will do. It’s in your best interest to find quality tenants; those that will pay on time, treat the property with respect, and sign long-term leases. The less you have to worry about the tenants living in your rental property, the more efficient you can be with your time. Conversely, those tenants that require constant attention will inevitably dictate where your time is spent — unless you have a property manager.

Long-Term Leases

While in the same vein as the previous key, it’s not enough to have good tenants if you want to retain your status as a part-time passive income investor; you need to pay special considerations to the lease terms. It’s in your best interest to focus on “longer” leases. Again, as a part time passive income investor, your time is very valuable; the last thing you want to do is spend the majority of it looking for and vetting potential candidates. Therefore, your time is better spent finding tenants that will favor long-term lease contracts. The longer you can guarantee a tenant live in your property, the less you have to worry about vacancies.

It’s true: there is no reason you can’t consider passive income investing as a part-time endeavor. With the right foundation in place and a mind for due diligence, it’s entirely possible to pad your retirement coffers with real estate while simultaneously retaining your nine-to-five. It’s worth noting, however, that becoming a successful part-time passive income investor will require an acute attention to detail and a propensity towards efficiency. Only then will you be able to operate a passive income portfolio on a part-time basis.