There are plenty of things you can do if you're looking to boost your paycheck. For one thing, you could jump on the side hustle bandwagon and get some type of gig that has you shuttling passengers around in your car or waiting tables on weekends for extra cash.
But an easier route to take could be to sit back and collect a nice pile of money every month without having to engage in side work every free minute you have. In fact, if your goal is to score a cool $1,500 a month in passive income, there's one real estate investment worth looking into.
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Are you landlord material?
If you have cash sitting around that you don't need for emergencies and aren't putting into the stock market, an income property is an investment worth considering. If you're willing to become a landlord, you could generate a steady stream of income that allows you to meet your financial goals or enjoy more financial flexibility.
When we think about passive income, being a landlord may not be the first thing that comes to mind. And it's true that being a hands-on landlord could actually involve quite a lot of work, from keeping track of rent payments to addressing maintenance issues and repairs.
But you don't have to be an active landlord. Rather, you can outsource that work by hiring a property manager. While you'll spend some money in the process, thereby eating into your profits, you'll also get to enjoy a nice income stream without having to lift a finger.
Where should you buy an income property?
To generate steady income as a landlord, you'll need to be strategic in acquiring income properties. In fact, the location you choose could spell the difference between being successful as a landlord or not.
While rental demand is generally up right now on a national level, it pays to dig into different markets and see where the most potential lies. To that end, you'll want to look at factors like:
- Local economic growth/new businesses coming in
- Local unemployment rates (higher levels of joblessness could mean fewer potential tenants)
- Local vacancy rates
Right now, with property values being up across the board, it could pay to focus your search on up-and-coming cities -- smaller and midsized metro areas that are seeing nice growth but aren't already saturated with rentals. You're likely to find homes at a more affordable price point in these areas, too.
Sit back and collect your cash
Being a landlord isn't your only option for generating passive income. In fact, if you're eager to get into real estate investing and would rather not assume the risk of owning physical properties, you could opt to load up on REITs, or real estate investment trusts, instead.
But being a landlord opens the door to not just a steady stream of income but also the opportunity to build equity in a property that gains a lot of value over time. And that's reason enough to give it a go.
