This seminar looks at real estate investing to generate passive income, an important source of income throughout life and certainly in retirement.
Lily Liu, our seminar leader, will first discuss the concept of passive income investing. There are many kinds of passive investments, meaning things to own that pay you regularly without much effort on your part. Rental real estate, once set up properly, is one of the best-known of these.
There are several things to consider if you choose to invest this way. These include:
- Knowing your financial position.
- Understanding if you are right for property management
- Research and education:
- Real estate ownership as a business is complicated. It’s important to educate yourself about how it works from all angles.
- Research on your market area for pricing and availability.
- Decisions about location. The best area you can find in your price range.
- Finding the right real estate agent.
- Who has the best loan deals? At this stage you can also look at mortgage lenders and current rates. You real estate agent is very likely to know of good lenders, but also remember that you don’t want to take his/her opinion as your sole source, and don’t be timid about establishing that relationship on your own.
With your research in hand, (although remember the value of ongoing education and networking,) you are ready to put together a detailed business plan/budget.
Here’s “where the rubber meets the road”. Your idea finally has to be proven on paper. Our seminar leader will provide you with a template for listing all income and expense. You gather all the costs associated with the monthly mortgage and with the maintenance of the rental property and you subtract the total monthly costs from the rent you are planning (and able) to charge.
You may well get a negative number! That’s okay, these projects usually don’t result in a positive cash flow immediately, and you have to be prepared to fund the difference. But the cash flow should turn positive over time, and when it does, you have passive income!