Supplemental Income: Passive or Active Investing?

March 12, 2018

There are many different ways to earn supplemental income; the more diverse your income stream is, the more flexibility you have in controlling your finances and achieving financial independence. Real estate investing is often seen as a way to earn more supplemental income. Why is that? As Kendall Davis from Fundrise stated, “Real estate can offer a consistent cash flow from rental income.” However, real estate investing requires time, expertise, and a lot of capital. These barriers prevent many from investing in real estate.

 

Active Real Estate Investing

To be an active real estate investor, you will have hands-on responsibilities and it requires a lot more time. It can also be  riskier in terms of profit because you are typically investing in a single property at a time. From needing real estate expertise to having the capital needed to buy and manage or hiring property managers, a profit is not always guaranteed. A real estate investment requires long-term involvement because properties are not cheap, and when you are the active investor, most of the time you can only afford to invest in one property. 

 

 

Passive Real Estate Investing

Being a passive real estate investor means less barriers: less responsibility, lower risk, and larger profits. Through passive investing, you are supplying the capital to experts of the industry such as Sound-REi. Passive investing does not commit you to a large down payment for a single property, and does not require you to have knowledge within the real estate industry. Sourcing, buying, and property management becomes the expert’s responsibility. Since passive investing does not require large amounts of capital, Investors can invest in multiple portfolios, thus diversifying their supplemental income.

 

 

Through passive investing, the barriers to real estate investment are lowered thanks to industry experts like Sound-REi managing these investments. If you are a busy professional that wants to get started in real estate investments as another way to diversify your income stream, make an appointment with Sound Real Estate Investments here.

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