Let me start off by saying that it took me 28 years to discover that you really do not have to be a genius to make some passive income. If you’re lucky, you make enough to cover your monthly expenses and then some so that you no longer have to have a 9-5 job anymore.
I currently own a fourplex in the lovely city of Los Angeles. No, I wasn’t born made to be a landlord and neither did I ever think about becoming one in my early adult years. It wasn’t until a co-worker of mine who owned several apartment buildings mentioned I should try it out and this put the little landlord bug/idea in my head. Now let me re-wind and state that I was newly married and did not own property and my husband and I were paying $1500/month in rent for a 2 bedroom apartment. We knew we made enough money to purchase property, we weren’t sure what type. Powered with this landlord idea, we were in between the purchasing a single family residence or a multi-unit dwelling (apartment building).
We finally made the decision to purchase the apartment building which we currently live in and own for approximately 2 years. I will add an additional blog with the purchase details. When we received our first rental checks we were absolutely stoked! I finally understood this making money in your sleep idea! The checks were in the amounts of $950, $1000, and $832. This was a total of $2782 of income to help pay for our mortgage. I must state here that due to being regulated under rent control, I could not raise rents to market price right away, but I knew that when I purchased the building. In any case, ever since then, I decided I’m purchasing more property as it becomes financially feasible to do so.
The idea behind this is purchase a property, at minimum break even or have a positive cash flow and have your tenants pay for your ownership. Our 30 year fixed loan is great, however, I will not reap the benefits of making over $4500/month net in rental income for another 28 years (when the property is paid off). Now don’t get me wrong, that’s great for retirement but it doesnt do much for me now. So my quest for now is to purchase more income properties and find other forms of passive income.
If you ask why do I no longer want to have a 9-5? Here is the answer. I’m now a mother of an infant and I want to spend time and go places as a family on a regular basis NOW! Not when my son is off to College and I finally retire. I need that time now not later. This is a struggle many people face, however, they feel that it is just a part of life. Well, it isn’t. Not if you want it to change. My son and my family are my motivating reasons, however, there is a wide range of motivators for people. Some people want to travel the world, spend time with a terminally ill loved one, not be on someone else’s schedule…whatever your situation is.