Some people have this idea that as soon as you’ve bought a property, you’re on the ladder and have access to infinite passive income. All you need to do is start buying and selling properties and sooner or later, you’ll have a large portfolio. This can lead to other investment opportunities and you’re essentially going to be financially secure for the rest of your life.

Unfortunately, that really isn’t the case.

Many of the articles and videos about passive income and property investment are extremely positive and sugar-coated. That is, they don’t often go into the problems that property investors face and the potential pitfalls that come with an overly enthusiastic attitude. So in this post, we’re going to explain how simply owning a property doesn’t mean you’re suddenly rich, and how much work is involved in actually managing and investing in property.

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The more things you delegate, the more money you’re losing

When people think of passive income, they might think of people sitting at home collecting rent from all of their different properties. Unfortunately, it doesn’t really work this way. No matter how much you’ve grown your property portfolio, it doesn’t mean that you can just collect a paycheck just for doing nothing. There are many decisions to make as a property investor and it’s not completely hands-off. In fact, you’ll have to get your hands dirty at times, doing things like cleaning a property before new tenants move in or personally renovating a home before it’s ready to be sold.

This is because the more services you hire to do things for you, the more money you’re losing. Think about it this way; if you’re getting $5,000 in rent per month from a New York property, then not all of that is going to you. Some of it goes to your taxes, some of it goes to your property manager, some of it goes to the cleaning service, and some of it needs to be reinvested into the property to keep it up-to-date and to fix issues.

However, if you handle some of these tasks yourself, you can end up saving a lot of money. How much money you’ll save depends on how much you’re paying to get the task done. Once you have enough properties, you’ll generally trade profit for being able to hand the task off to somebody else. But at the beginning, you’ll need to do some work yourself.

Properties don’t always come in great condition and they don’t stay in great condition

Properties are subject to wear and tear. No matter if it’s a residential home, a highrise office, or a humble corner store. You might need to contact an interior flatwork contractor to help you fix up the property so that it’s in a workable state, you might need to lay down new utilities or fix existing ones, and you might have to retroactively fit new technologies such as air conditioning.

There are many considerations to keep in mind when becoming a property investor. Just don’t overlook the fact that properties can change over time and need work to be attractive.