Real Estate CareersWhy investing in real estate and having a full-time job is a good combo by Victoria Daibes May 31, 2017February 3, 2019 by Victoria Daibes May 31, 2017February 3, 2019No one said that having a day job and investing in real estate is a mutually exclusive relationship. The majority of real estate investors opt to stay employed while devoting sufficient time to building an investment portfolio on the side. It is up to you to decide how you want to strategize and manage your real estate property, but one thing certain: in order for you to capitalize on your investment, you must treat it as a business above all else. Investing in real estate is no easy task and you must show commitment and dedication to get it off the ground. Once you reach a position where there is a surplus of cash flow coming in from your real estate investment, choosing to keep your day job becomes an option.Related: 14 Common Mistakes of a First Time Real Estate Investor and How to Prevent ThemFollowing are some reasons why you should keep your full time job when you first become a real estate investor and tips on how to survive both duties:Maximize your time and be efficientOwning a business is no walk in the park and if you are thinking of investing in real estate while working, you have no choice but to make sacrifices along the way. Netflix and chill? Be rest assured, sacrificing your weekly dose of Netflix will not suffice when it comes to running financial analysis, studying market trends, finding an investment property, doing analytics, and communicating with your team. There are many advantages to investing while working full time and contrary to popular belief, there is plenty of time in a week to do both effectively. You can devote up to 60 hours per week handling all real estate activities in tandem with your full time job. The trick is to manage your time effectively after work hours and during weekends to delegate the business in the best way possible. To save you time, you have the option to hire a property manager to manage tenants, look out for contractors, collect rent, take maintenance requests, handle eviction notices, and much more. Find more real estate investments by using Analytics to save you time or hire a realtor to expand your portfolio. Streamline your process and find what works best for growing your business. Remember, the key to investing in real estate while working a full-time job is to work smart, not hard.Related: The Use of Predictive Analytics in Real Estate InvestingPassive vs Active Real Estate InvestmentTo put it in simple terms, passive investing in real estate usually refers to real estate investors with full time jobs whose real estate rental income is only secondary to their main income, while active investing applies to independent contractors or better yet, real estate professionals that do this for a living. Full time employees qualify for the passive real estate investment role because they receive W-2 income, while independent contractors have 1099 income. With W-2 income, payroll taxes are automatically deducted from your paycheck and then paid to the government through your employer. If you’re an entrepreneur or real estate professional, you are responsible for calculating and filing your own payroll taxes on a quarterly basis. There are advantages to having a passive role if you are starting out in the real estate business, in terms of tax benefits as well as the eligibility for bank financing.Whether you choose to take on a passive or active role, when it comes to investing in real estate, keep in mind of the following;Having a good credit score puts you at a better advantage for a mortgage. Having a surplus of capital is another major prerequisite in real estate investment. Lenders make it a lot easier for W-2 employees to qualify for a loan because of the stable source of income from their day job. Passive investors are limited in the number of properties they can manage because of their day job. Ideally, they could manage up to 2-3 properties at a time. Active investors have a greater role when it comes to investing and managing more properties.Both type of real estate investors get almost the same tax benefits.If you are starting out, passive investing is an ideal option for you and real estate income becomes secondary.If your real estate business is secondary source of income, you can qualify to deduct some of your real estate losses against your active income. This is referred to as the ‘$25,000 Exemption’. Being a passive investor is very little work compared to actively investing, and it might require only a few real estate activities, such as researching properties, calculating cash flow, and managing apartments.If you are pressed for time, passive investing might also be the way to go!Related: Are the advantages of investing in real estate worth it?More reasons to keep your job in the early stages of investingTo kick start your investing in real estate, a full time job is a great asset you need to build your portfolio investment business. Your steady flow of income can qualify you to get approved for bank financing and in turn increase your chances at qualifying for bank loans. Not only that, but your steady influx of cash flow can give you a better credit score when starting out, in order to grow and maximize your real estate business portfolio. At first, you can use your income money to invest but once you hit the road running, you will use your income money to pay off your living expenses while reinvesting the money from your investments into buying more real estate.On the flip side, individuals who don’t have a job and are full time real estate investors are at more risk when qualifying for bank loans and might pay higher interest rates to compensate for the risk. To qualify for a loan, investors or entrepreneurs must be able to generate sufficient revenue from their business and show proof of at least 2-3 years of steady income. With high risk, comes higher returns and real estate investors can reap off the benefits from investing in real estate after the early stages. If you are starting out, however, keep your full time job in the meantime until you get your business up and running. Once you get it off the ground, it is your call whether or not you want to keep your full time job. Invest but don’t quit just yet! Once you’ve decided that you are ready to starting investing in real estate while working your 9-to-5 job, make sure to check out Mashvisor for available properties across the US. Start Your Investment Property Search! START FREE TRIAL Cash FlowPassive InvestmentsRental Management 0FacebookTwitterGoogle +PinterestLinkedin Victoria DaibesVictoria is an experienced content writer who enjoys writing about all aspects of the real estate market and industry. Previous Post Professional Property Management: When Is It Worth the Money? Next Post Are furnished apartments for rent a good real estate investment idea? 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