Earning passive income is everyone's dream. If you want to have a satisfying, fulfilling retirement, it really can't be beaten. So many people rely on passive income every year to not only fuel their financial futures but to unlock financial freedom.
For those of us who want to earn serious passive income—the kind of income that can create wealth for the present and the future—there has to be something more. That's where real estate investment comes in.
Passive single-family real estate investment is one of the best ways for investors to earn passive income. However, not every real estate investor is as effective as they could be. If you want to really get the most out of your investment strategy, it's time to ditch these bad behaviors.
3 Habits Real Estate Investors Must Lose to Enhance Their Income
1. Doing Busywork
We live in a society that is obsessed with being busy. As real estate investors and professionals, there's a certain image that we often feel we have to maintain: and that image is busy. As passive investors, there's almost more pressure to be busy!
Remember: busy is not the same thing as productive.
Are you wasting your time chasing empty leads, returning phone calls that don't deserve your attention, or going back and forth with sellers when someone else could be handling it for you?
Here's something to learn about passive real estate investment: if you can find someone to handle it for you, find them. It might seem counterintuitive to hire people to make money, but there comes a point where it's necessary if you want to both be efficient and maintain a healthy level of growth.
Don't let yourself get bogged down in the weeds when you don't have to be. Instead, find good, skilled individuals who can handle it for you.
Otherwise known as the "Fear of Missing Out," FOMO plagues this generation like none other before. With the advent of social media and smartphones, we're constantly exposed to information about the people around us. We see other people, their accomplishments, their lives, and the very best versions of what they want us to see.
For real estate investors, FOMO can create an unhealthy drive to compete with other real estate investors who are "better" than us. It's less about leveling up because you want to be better, but more for the sake of jealousy or impressing other people. That's not healthy!
FOMO is rooted in insecurity and negative feelings. No good decisions are made when they're based on negative feelings. You should never jump into a market, purchase, new strategy, technology, or opportunity just because you're afraid you're missing out on the next big thing.
It's not worth it.
3. Being Cheap
There's an old adage that says, "you have to spend money to make money."
In many ways, that's true. In real estate investment, you won't find much success in obsessively penny-pinching your way through it. While yes, you absolutely have to be conscious of how much you spend and budget appropriately, you do have to spend money. There are two key areas where being cheap just won't cut it.
This one is a balancing act. It very much depends on your strategy and approach. If you are buying on your own and not with the help of a turnkey investment company, you do have to factor in the cost of renovations. You have to buy for less in order to have a profitable investment when it is all said and done.
However, regardless of your strategy, looking for the cheapest property on the market is never the best way to go about it. The cheapest property is usually in the worst location and suffering from the biggest issues: and that's not what you're looking for. You're looking for good deals: not big projects. Train yourself to look at the whole context, not just the numbers.
Some people really wrestle with the idea of spending money on property management. Managers are some of the best partners you can have in this business. If you have top-notch managers, you are guaranteed to have excellent customer service for your tenants and for yourself. It's so worth the peace of mind!
Property management can make or break your investments, so it's worth spending the money to, in turn, invest in good companies with good people. This is one area where you do not want to cut any corners.
Are there some bad habits that you had to break before you could find success? Tell us how you overcame in the comments.