Motley Fool says this about passive income: The IRS has its own (strict) definition of passive income, which only covers income from rental activity or business activity in which the investor does not materially participate. And, there are tax benefits associated with true passive income,
Even though interest rates have gone from 2% last year to almost 3% this year, in today’s investment world interest rates are too low to generate a decent passive income after taxes and inflation. So why not consider investment property in LA?
A few of the benefits of Investment Property for Passive Income
Double the Profit Potential: An investment property offers two opportunities for financial gain: rent that can generate a return to supplement your income, and appreciation that can result in a sizable profit when the property is sold. There may also be tax advantages available, depending on your financial profile.
Little or No Money Down: Unlike the stock market, you can enter the world of property investment with a relatively small amount of out-of-pocket money. Among your financing options, you’ll find loans requiring little or no money down. There are even options that let you use the equity from your current home to purchase your investment property. That leaves your liquid cash assets available for other investment opportunities.
Give us a call today at 805-426-9988 to talk with us about ways to buy notes and deeds to generate a passive income, or build a portfolio of rental properties, or use hard money lending to supplement your income.
Returns can vary from six to twelve percent (6% to 12%) annualized based on loan to value of 75%, with short duration of six to twenty-four (6 to 24) months. Here’s what Joseph Hogue, CFA had this to say about property investing:
I’ve invested in real estate since 2001, first as a real estate analyst and then through my own residential properties. I know a few investors that simply act as the “money” and do little more than look over reports brought to them by different contractors and managers. Most of them started in the business by doing more of the work but have now grown their portfolio to cash flow enough that they can hire the work out.
This level of passive income real estate investing is in stark contrast to what many people try to do when starting out in the real estate investing business. The passive part of passive income is a myth. You’ll quickly find that it can be a part-time job at the very least.