Passive Income From Property Investing

Why do people invest in property? It’s a fairly straightforward answer: the reason is obviously to make money. There are a few different ways that you can make money in property, but the best way which I have come across is to be making passive income, week in, week out so that as you grow your property portfolio, your income continues to increase.

There is also another major benefit to owning property which is that usually if you hold property for a long enough period of time, you will also make a profit by the growth in value of the property. This growth is useful because you can use the additional equity you own in the property which is created by the growth in value. 
The way you can use this additional equity is to borrow against it and use this equity as deposit funds to purchase more investment property which again produces more passive income.

The key to investing is to buy properties well, so that after you have paid your loan payments and other monthly expenses on the property, you can rent it out to make a monthly surplus income which is your cashflow. Quite often investors will not have any surplus income left over after all the expenses, and so the investment ends up costing money each month instead of making money each month, which is not a desirable outcome.

There are strategies however which can be put in place from the outset to make sure that your investments are all cashflow positive, and even can be applied to existing properties with negative cashflow to convert these to positive cashflow.

One really great way to set up a property investment to make very good monthly cashflow is to sell the property on a lease option. The way this works is to find a buyer who is low on deposit funds to source traditional finance from a mainstream lender, but would dearly like to purchase their own home.

This can be set up with a small upfront deposit and a repayment higher than normal rent where a portion is applied towards the purchase cost. There are many buyers who buy their home this way due to their inability to fit into the normal lenders guidelines. This strategy provides a win-win scenario, it helps someone get started in their own home, and it provides really good cashflow for your investment, as well as a lump sum down the line when the buyer cashes you out.

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