#123 Is Passive Real Estate Really Passive? - Passive Income MD

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Episode #123

#123 Is Passive Real Estate Really Passive?

Many people agree that passive real estate is a great way to create additional streams of income. Although some are understandably intimidated by the idea of managing multiple properties, finding tenants, and making repairs. If the goal is to truly create passive income, then they determine that real estate really isn’t an option.

16 Min • September 5

Episode Highlights

In this episode, Dr. Peter Kim will dive into the age-old question: is “passive” real estate investing really passive? 

Are you interested in learning more about investing in real estate? Consider joining Passive Real Estate Academy. 


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Now, let’s look at what we discussed in this episode:

  • Define passive income
  • Real estate investing as in a continuum 
  • Active real estate
  • Passive real estate
  • Determine your portfolio
  • Peter describes his personal wins in passive real estate
  • Income to time ratio

Episode Breakdown

[2:32]

We can define passive income as what is not proportional to the time you put into acquiring it. As compared to proportional, which means that the time you put into your work is what you will get out. Passive income will eventually create a NOT proportional in the time, effort and capital you put into it.

[4:03]

Real estate investing on a continuum. There are many, many more ways to invest than direct ownership. Of course, each way to invest comes with its own pros and cons and characteristics. It’s important to know the options and choose what type of real estate is best for your investing dollars and time. 

Real estate investing can be as active or passive as you want it to be.

[5:00]

Active real estate typically means that you are the landlord, own the properties and ultimately manage the property. Ultimately, you have control over what to spend in maintaining, refi, or sell.

[6:28]

The big dividing line between “active” and “passive” is whether you take on the role of landlord. When you invest in other people’s deals and they do all the work, I consider that passive real estate investing. 

Syndications, private real estate funds, REITs are when you take your capital and allow someone else to make all the decisions, handle the business plan and implement it. If this interests you… leverage those who have experience around you and do your due diligence.

[10:31]

Is “passive” real estate investing really passive? Passive real estate is when you are investing in syndications, funds and REITs. Dr. Kim describes his own experience, work effort over the past several years in investing in passive real estate.

[12:23]

Think about your income to time ratio. What creates freedom is more income for time. How much am I getting paid for the hour I spend on an investment? Of course up front, you put in the time. But over time, quarters and years that income will continue to drop in. 

Passive income is income that is NOT proportional to the time you put into acquiring it. 

Ultimately, the answer to whether passive real estate investing is really passive is simple…Yes!

We talk in depth about all of this and more in our course – Passive Real Estate Academy. Want to learn everything about investing in real estate with confidence? You can grab your seat right here!

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