A few days ago I wrote in a forum that a real estate investment (rent a house for example) is a passive investment.
This statement has triggered a series of unpleasant comments to me.
Many argued that a real estate investment was not entirely passive
What does “passive income” mean?
I work 40 hours a week. If I count travel, I spend 30 minutes to go to work and another 30 to go home. At least two days a week I have to go to customers so instead of 60 minutes I have about 180 minutes. So travel is about 9 hours a week
Often I have to do unpaid overtime say on average 3 hours a week.
This is the time I spend at work:
- Ordinary work 40 per week
- Trave 9 hours per week
- Extraordinary 3 hours
Total 52 hours per week
I do not think my situation is different from that of many of you.
But if you have for example 4 houses with a rent of 500 euros per month.
How long will it take for managing your business? 8 hours a month for each house? 16 hours a month for each house?
So from my point of view a real estate investment is passive.because the time I waste is very small
Probably things would improve if instead of real estate I had an investment of ETF and apply a strategy “Buy and hold”.
In this case, probably the wasted time ta would be a few hours a month.
From my point of view, financial independence means making money work for you in order to free up enough time to be happier so a real estate investment could be a choice