A lot of people think that just because they have some sort of real state that they will enjoy passive income. I know a lot of bloggers who made quite a bit of money in the online passive income game translating their blogging earnings to rental earnings by buying up rental properties. So far so good, right?
Well, here’s the problem. If you are going to be making that kind of transition, the solution that you’re looking at carries with it its own particular set of challenges. In this context, the word “challenge” is really shorthand for problems because if you don’t play the game right, you might be creating more problems than you are solving.
I’m not saying this to discourage you from setting up rental income systems. I’m not doing that. That is not my intention.
Instead, I want you to be realistic about what you’re about to do. I want you to see the whole thing with wide-open eyes. I want you to see the whole picture because it’s not as black and white as you think. It’s not as clear-cut as you think.
A lot of people think that when they put up a rental space, you just need to announce it to the world and people will beat a path to their door. Boy, do I wish that is absolutely true!
I remember the first time I put up a building, and this was basically a foreclosed building that I flipped. My wife originally wanted to sell it, but the market wasn’t so hot so we decided to turn it into a rental asset. Both of us were pumped up because we thought “Hey, since rents are going up and rental units are few and far between, this a slam dunk.” In fact, my wife was saying that it’s like shooting fish in a barrel.
Well, two years waiting for tenants quickly disabused us of that fantasy. It turns out that people are not going to rent units just because they have no other options. They’re going to find options. That’s how sophisticated and how driven people are. Don’t think that just because you’re offering the right space at an average price that people would just get all excited. They won’t.
You have to make it worth their while. This is why my and I changed our luck when it comes to our real estate passive asset by installing the kind of composite decking UK residents love. When we did this, we attracted a lot of tenants, and now the unit is paying for itself, and is almost paid off.
Cosmetics do count because you have to understand that at the end of the day, product positioning is all psychological. You can sell somebody a rock that cost you all of one dollar for five hundred dollars if you position and promote that rock properly. A lot of this has to do with psychological signals, and composite decking may not be all that big of a deal. It’s definitely not sexy but if it conveys enough cosmetic firepower, you’d be surprised as to how quickly your rental units go.