Definitely posting this because I am dreading going back for another week of work, but for argument's sake:
If you wanted to get to $200k/yr in passive income as quick as possible, how would you do it?
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Probably a vast AirBnB network with property managers for each region that handle all the issues.
Lol this is the answer I would expect from a high schooler whose only finance knowledge comes from TikTok gurus
Well this is the best answer on thread so far that doesn’t require a lot of cash to start. I’ve also noticed you didn’t even provide any idea.
None of the other suggestions require a lot of cash to “start”. You can start buying stocks with $100.
Airbnb is probably the least passive of all real estate investments. The amount of work per dollar of equity invested is very high because you’re writing tiny checks to acquire these properties (compared to writing a $5 million check to acquire one apartment property which would get you to your $200k).
It’s also a competitive, highly volatile business. If you’d ever bought or financed a hotel you’d understand this. Anyone who talks about “my Airbnb portfolio cash flows $20k per month” is silly because there is no “typical month” in hospitality. You’ll feel the effects of a random conference, a random concert, whatever, and you need to know about these dates to be able to push the rate at your property. Can you imagine doing that for dozens of 1-2br condos or single family homes? Absolute pain in the ass. Your property manager would eat all of your income.
The real answer is already in this thread. It’s $4-$5mm of stocks, bonds, or other yieldy investments you can access from your phone. You don’t need multiple employees to manage your $5m in stocks. And the SP500 stock you own wont call you in the middle of the night with a broken toilet. Or sue you because they hurt themselves on your property, etc
As someone who actually owns a few STR properties I thought I might weigh in for what it's worth. If you're able to get good deals and execute a decent strategy you can get pretty good returns (10-20% cash on cash / 20%+ IRR) in an appreciating area while using a property manager to make it a passive investment. It's definitely not fast though and it requires a lot of capital (down payment + furnishings) and has high expenses (management fees, utilities, etc.). I can't speak to a lot of the content on social media, but from my perspective STRs can be a pretty nice way to approach individual RE investing as you generally get more cash flow than traditional long term rentals.
As a data point, I live in a MCOL / growing city and implement pad splitting for my STRs and each one (bought for $150-$300k with traditional financing) produces $10-$15k in annual cash flow. I plan on purchasing a handful more in order to reach $100k in passive income with my goal to do this in 3-5 years - this will probably take a portfolio of 8-10 rentals to cash flow that consistently. I'm sure there are smarter and faster ways to execute this (e.g., no money down, HELOC's, creative financing, more attractive markets, etc.), but I'm ok with sticking to local markets and putting more equity in my deals. Also, for what it's worth I'm not 100% in STRs - my portfolio is about 2/3 index funds / the market and 1/3 RE.
REITs, BDCs, real estate of a larger scale beyond just some houses, like a shopping center, or even a moderate sized apartment complex, using DRIP to build up a portfolio for dividend stocks/MF funds/ETFs. Hell, winning the lottery or being some kind of "savant" and marketing how to get rich quick courses online to make yourself rich in the process and living off the marketing.
how much do we start with
Let's say $100k saved up to start plus an additional $50k/yr until goal is achieved
Boring answer but... bonds, at least part of it. You'd have to have a lot of money invested to hit $200k/year, but even putting a portion in right now (or in 3 months, or whenever you think rates are peaking) is more or less guaranteed income at a very high set return. Even the safest AAA bonds are north of 5% right now, that's a pretty good return for completely passive buy and hold. I Bonds if you haven't already as well
Other side hustles like Airbnb, consulting size biz etc are just not that passive, it requires either $$$ help (property management) or a ton of work on your end. Not that they are a bad investment but if I had a big chunk sitting in cash that I didn't want to have in equities right now I'd throw it straight into quality bonds at a big yield and forget about it
I'd just put $6.7M in my Capital One money market. Simple interest income.
accumulate like $1M in SPY and make passive income by selling covered puts and calls. $200k per year is achievable on $1M with covered puts and calls.
Bernie Madoff checking in with the split-strike conversion strategy ;-)
not a bad strategy
This is something I am looking to do. I know how to do basic repairs - electrical, plumbing, drywall, flooring.
I may look into getting a GC license to do side gigs as a HandyMan.
Start a crypto exchange and then just steal all the money
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JEPI has a high yeild div
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