A Rewarding Side Hustle – Make an Extra Income Outside of Your Day Job – Without Becoming a Landlord
So… You’re looking for an excellent side hustle and you want to invest in real estate, but do not have the time, energy or knowledge. You have heard that investing in multifamily rentals can be lucrative, if you only had the know-how and a huge down payment. Is there a way? Yes…
Forced appreciation is the increase in the value of an investment property due to an investor’s actions, in this case, making it more profitable. Contrast this with natural appreciation, sometimes called market appreciation, where uncontrollable (by the investor) market forces are at play.
A preferred return is a return that puts you, an investor, in a preferred position when it comes to profit distribution of a project’s cash flow. Money goes to you first when there is a distribution, and until the hurdle of the preferred return is totally met, the syndicator gets nothing. A preferred position is first in line. If a project doesn’t make any money, chances are that you will not receive a return.
CoC stands for Cash-on-Cash Return, IRR means Internal Rate of Return, and AAR is Average Annual Return. They are all various measures of how profitable an investment might be, though have their own characteristics. Understanding returns, and the different metrics that are used, helps compare different investment opportunities.
Which one is better, stock market vs. passive real estate investing? This has been a heated debate for quite a while. There are many pros and cons on each side, and unfortunately it is up to you to determine which risks and rewards you are willing to live with and hope for.