According to a five-year study conducted by Tom Corley, author of the popular finance advice book, “Rich Habits”, over 60% of self-made millionaires have something in common; income streams. It seems rather obvious that to make more money you need more sources of income, but most Americans are already juggling two or even three jobs and are nowhere close to hitting the million-dollar mark. So what are the rich guys doing that most other people aren’t? Two words: real estate. When looking for ways to grow your wealth, real estate is by far the most popular choice for investors. It’s an easy way to generate a stream of income without giving up all your free time to another job. If you’re working multiple jobs and still use signature loans whenever a financial emergency strikes, consider these ways of investing in real estate:
In the world of real estate, active investing is the act of doing everything yourself, which requires a lot of startup money and even more working know-how of real estate. Active investing requires an ability to carefully evaluate the market, knowing where and when to buy, and most importantly, how to manage your property in order to make a steady stream of income month after month. If you lack these skills, you could easily run the risk losing a substantial amount of money.
Passive investing provides income at a more easy-going pace and isn’t as “hands-on” as active investing. With passive investing, you can make money without all the heavy responsibilities most landlords have to face on a regular basis. You don’t need nearly as much capital to get started and all the legwork is handled by investment professionals. Also, passive real estate investors have a much wider range of investing options, such as property sizes, locations and even the class of real estate. It’s a much safer bet than throwing all your eggs into one basket.
There are many ways to invest. If you care to try your hand at investing in the real estate market, you’ll need to decide which strategy fits your income and risk tolerance the best. If you have the means and management skills necessary to invest actively, the potential rewards are faster and easier to glean. But if you don’t have a good handle on the housing market and can’t afford to drop a boatload of money into one single property, you may want to invest passively and allow your investment to grow over time. Decide which way works best for you and you could start building a new income source today.