The Average Joe likely looks at the real estate market of 2024 in shock and awe. Prices are high, but mortgage rate cuts promised to bring everything back into balance. Meanwhile, data shows that the real estate market remains frozen, with only a tiny percentage of homes on the market changing hands.

In the information age, misinformation is a big problem. Plenty of people say whatever it takes to earn a buck, stir up controversy, or gain notoriety. It’s no different in the crowded world of financial and investment content. Take a look, and you’ll find your fair share of financial gurus offering empty, inactionable advice. And from people like that come plenty of myths…namely about earning passive income!

As the real estate market cools and potentially slides into a downturn (which is natural and not the same as a crash, mind you), investors must examine their risk exposure. New data from ATTOM shows that Southern and Midwestern markets are at the least risk for a serious downturn overall.

Are your investment goals out of reach as a “late bloomer” investor? Sure, in this business, time is of the essence. The sooner you can get started, the better. That doesn’t mean you’re disqualified from real estate investment success if you don’t start until your forties, fifties, or beyond!

If you were to ask a room of SFR investors what the most crucial factor in success was, you would get a whole array of answers: the location, the property itself, the property management, accurate number-crunching…the list goes on!

Though passive investors may not be involved in the day-to-day operations of their rental properties, they have plenty of responsibilities. One such responsibility is in managing and maximizing cash flow. This task starts from the outset as you weigh the cost of a rental property and its ongoing expenses against cash flow potential. But it doesn’t end there!

Those ongoing costs tend to increase over time – and part of your job is mitigating those increases to best preserve and maximize passive income.

Further Reading: Top Tips for Increasing the Profitability of Your Investment Properties

Investing out-of-state is one of the best things a passive real estate investor can do for their portfolio. After all, investing beyond your local market comes with some distinct advantages, such as:

Is your real estate market overpriced? Navigating today’s housing market isn’t easy. Though inventory is going up and mortgage rates are going down, property prices are still sky-high. For the real estate investor, it’s pretty easy to assess your local market. Things get tougher as you go further afield.

Sometimes you’ll hear us refer to a very simple rule for real estate investors: take nothing on faith. But what does that really mean, and why is it essential to success as a passive real estate investor? 

Essentially, we’re telling investors to do their due diligence, to ask questions, to verify, and to absolutely look a gift horse in the mouth. We’ve all heard what they say about making assumptions!

One of the arguments critics like to use against real estate investment is its lack of liquidity. To access cash, you must endure the rigamarole of selling the property. As any seller knows, this process can be one long headache. 

Fortunately, having cash in hand isn’t the only way to reap the rewards of your property’s equity. Investors should know all of their available options. We’re not necessarily recommending these strategies. They each come with unique benefits and drawbacks, and we urge individuals to do their due diligence.