👋 Join us for a special webinar Thursday, January 11th
Learn More

Creating Passive Rental Income Streams That Enhance Your Lifestyle

ethan-lieber-latchel-ceo
Ethan Lieber
•
November 26, 2018
Creating Passive Rental Income Streams That Enhance Your Lifestyle

A couple of years back, I had a fascinating conversation with a friend looking at property management. She was just getting started building a property portfolio to make a passive revenue stream. Before starting Latchel, I had built passive income businesses on Amazon’s platform, a little bit different than property investing, but we talked back and forth about how to start a passive income business. She wanted to know what milestones she should set for her own business for 5 years and 10 years down the road.

My response was not exactly what she anticipated.

She was approaching her business from the wrong mindset. When building a passive income business, I would not build my personal life around the business’s goals. Rather, I want to form my passive income streams around the life that I want to live.

Building a Business Around Your Lifestyle

For me, it was about building a passive income stream that I could support with some weekend work so that I could spend my work week building an even bigger, better, more scalable, and disruptive business.

Often in life, we take the wrong route because we answer the wrong question. We get so tunnel visioned on the wrong questions that we can’t take a step back and see what is REALLY important. It is exactly the same with property investing. The human mind enjoys participating in matches, keeping score, competing with other people, catching up, and overtaking competitors. We form our questions around these vanity metrics.

If you are an analytical person, you may monitor the metrics of operation on your portfolio:

  • Are we cash flow rich and what is our money on cash returns?

  • What is our return on the equity we’ve got in our portfolio?

Tracking significant metrics is typically a fantastic idea that has the extra advantage of making you feel as a fantastic steward of your money. But that is where the competitive metaphor can backfire. Our brains have a propensity to optimize and optimize what we concentrate our attention on. Because of this, we begin maximizing and optimizing the metrics we are monitoring: the yields. But what about your personal life? Wasn’t that the reason you started a passive income business in the first place?

While I am a big believer in the usefulness of monitoring your numbers, I believe that it’s the right reply to the wrong question. I feel that the most important intention of property investing is that it will assist you in living an amazing life. Perhaps yields really aren’t the most important thing.

Consider it this way: If you construct a”property empire” that keeps you chained to the positioning of your possessions, is that any different than that present job you despise? If that which you actually need would be your time, flexibility to travel like a local (rather than a tourist), would not a more compact portfolio do you better? If you’re shooting to get a lifetime of financial freedom, does a multimillion dollar debt burden achieve that goal — or could you be better off with fewer properties that are all paid off?

These look like philosophical musings, however they’re life impacting because the questions that you ask affect the choices you make and also the direction you move.

A Real Life Example

Imagine a property agent with a property portfolio worth $800,000 and corresponding obligations (mortgages) on these assets of $300,000. Since she considers her choices during the next five to seven years, she could either a) focus all of her efforts paying off debt or (b) take money out from her equity and re-leverage it to obtain more resources.

What is the correct call? It is dependent upon the question she is asking herself. Leveraged yields must always outpace un-leveraged yields. However, if her issue is, “What can help me make the most passive income I want with no strings which keep me out of traveling a portion of the year,” she then must opt to pay back the debt.

Therefore many property investors function as if they’re a portfolio manager at a company whose performance on the project is dependent upon the yields they provide and the way those returns stack up against opponents and benchmarks. You may not understand this, but you do not need to operate like that.

It is possible to opt to operate like you’re a life architect employed to construct the life span of your dreams on your own terms. Then you use the right strategies, resources, portfolios and yields as resources which underwrite that lifestyle.

Live the Life You Want

We ought to own investments which help us underwrite the life we would like to build rather than permitting the pursuit of these investments to own our lives.

At first glance it may look to be a subtle difference, but the truth is, it is a considerable mindset change — the questions that we ask ourselves affect each decision we make. Ask questions that steer you toward a passive income stream built around your life, not the other way around.

Share this
Related Posts

See why property managers love using Latchel

Unlock the Potential of Digital Insurance
Launch a tailored renter's insurance program

Sure provides tailored renter’s insurance that enables property managers, owners, and residents to protect their property, minimize risk, and experience the peace of mind that comes with the protection of your assets and business.

Most leases require renters insurance. So, we’ve partnered with Sure to provide that option for your residents. While residents aren’t required to use Sure to meet the renter’s insurance requirement, this is still a convenient option you can offer to your tenants. 

All services and products are provided by Sure, not Latchel subject to Sure’s terms and conditions.

Property Inspection Platform
Automate and Organize Inspections with RentCheck
check-mark-icon

Make Inspections Easier
RentCheck saves time by enabling residents to complete inspections on their own. Customization and automation ensure the job gets done.

check-mark-icon

Stop Wasting Time
Schedule inspections for all stages of the lease cycle at any cadence you choose. RentCheck handles the reminders.

check-mark-icon

Instantly Submit Work Orders
Take advantage of Latchel's integration with RentCheck to instantly submit a work order for any maintenance issues that pop up on an inspection.

check-mark-icon

Modernize Your Process
Easily compare new and existing inspection reports, side-by-side, and avoid security deposit disputes.

check-mark-icon

Prompt Routine Filter Changes and Resident Tasks
Schedule resident reminders to replace filters and other upkeep tasks over the course of the lease lifecycle.

To learn more about RentCheck, talk with a Latchel benefits expert today. All services and products are provided by RentCheck, not Latchel, and subject to RentCheck’s terms and conditions.

Affordable Pest Control

Access world class pest control for a fraction of the normal price. No need for new software or a complicated setup.

check-mark-icon

Easy Pest Control
Residents simply reach out to Cover Pest if there is a pest issue, and Cover Pest takes it from there.

check-mark-icon

Clarity on Who Pays the Bill
No more awkward conversations about who is responsible for the bill! With Cover Pest as a resident benefit, residents get pest control for covered pests without an additional cost.

check-mark-icon

Vendor Sourcing
No more sourcing for vendors! Cover Pest will source and coordinate with vendors for each pest control request

To learn more about Cover Pest, talk to a Latchel benefits specialist today.  All services and products are provided by Cover Pest, not Latchel, and subject to Cover Pest’s terms and conditions.

Air Filter Delivery Subscription

FilterTime is an air filter delivery service that makes it easy and convenient for residents to replace their air filters. FilterTime customers can protect their HVAC system, reduce dust and pollen, save money on energy costs, and more by leveraging this delivery service.

check-mark-icon

Reduce Labor for HVAC Issues
Filter delivery service results in a 38% reduction of total HVAC ticket requests.

check-mark-icon

Cost Savings on HVAC Repairs
Average HVAC repair costs have increased by 48.7% year over year. an air filter delivery subscription can cut costs up to $250-300 per property per year.

check-mark-icon

Energy Reduction
Filter delivery is saving residents $14.82 per month in energy costs.

How it works:

Choose from almost every size and type of air filter including custom-made sizes

Choose how often you want your filters delivered

smile-icon

 A box of brand new air filters delivered to your resident’s front door

To learn more about FilterTime, talk with a Latchel benefits specialist today. All services and products are provided by FilterTime, not Latchel subject to FilterTime’s terms and conditions.

Boost resident satisfaction and drive good resident behavior through a rewards, incentives, and credit building program
check-mark-icon

Drive On-Time Rent Payments
Piñata rewards renters for on-time rent payments through Piñata cash, and boosts renter's credit scores for online payments.

check-mark-icon

Boost Resident Satisfaction
$30 gift card to use at select brands and businesses, $25 restaurant card, 720 annual Piñata Cash to use on rewards, Early lease renewal gift.

check-mark-icon

Attract and Retain Renters
2 out of 3 renters prefer properties with rent reporting. Plus, residents get incentives for early lease renewals.

check-mark-icon

Rewards Residents Love
Residents can use Piñata Cash on brands they know and love, such as: Starbucks, Amazon, Sephora, Lego, Target, Walmart, Home Depot, Lowes, Doordash, Best Buy, and many more!

Piñata Cash

Residents easily earn Piñata Cash any day of the month by doing things like taking surveys, referring friends, or trying out new products.

Residents also get access to big-ticket giveaways, limited drops and super surges!

And, with exclusive access to our marketplace with over 300,000 deals, residents can squirrel away up to $4,500 annually.

To learn more about Piñata, talk with a member of our benefits team today. All services and products are provided by Piñata, not Latchel subject to Piñata’s terms and conditions.

Master Liability Insurance

Now you have one less thing to worry about with a Master Liability Policy through Obie.

check-mark-icon

Affordable Coverage
Affordable policies available with liability coverage starting at $100,000 and up to $300,000 to meet any property manager insurance requirements.

check-mark-icon

Stay 100% Compliant
Master policy provides $100,000 for management companies and owners by ensuring 100% of occupied homes and units are covered for property damage liability issues relating to resident negligence.

check-mark-icon

Peace of Mind
Liability coverages include perils such as fire, smoke, water, explosion, overflow of sewer, and many others that provide coverage for damages you (the resident) may cause to your unit or home

check-mark-icon

Personal Liability
Personal liability coverage is automatically include to protect you against claims where you may be considered legally liable. (Bodily injury claims, dog bite claims, and more)

check-mark-icon

Additional Coverages
Additional/expanded coverages are also available. (Pet damage, identity fraud, theft/vandalism, and more are available!)

All services and products are provided through Obie and are subject to Obie’s terms and conditions.

👋 Join us for a special webinar Thursday, January 11th