You’ve probably heard many people say real estate investing is a great side hustle that has the potential to become a significant source of income. This makes sense since people have profited from real estate since its inception, and it can be highly lucrative. Real estate’s profitability isn’t questioned, but the idea that it makes a good side hustle is questionable.
1. You should be able to pause a side hustle
The best side hustle is something you can pause at any time and come back to later without losing too much traction. For example, if you start a sticker business, you wouldn’t want to stop advertising, but the business should be able to run on autopilot with the exception of customer service. To take care of that, you could easily outsource your customer service needs while you step away temporarily.
Real estate investing isn’t something you can pause. Not exactly. When you own rental property, you are obligated to be available to your tenants at all times for emergencies, and you can’t just stop being a landlord if you feel overwhelmed. The only exception is when you have a property manager. In that case, they’ll be your tenant’s first point of contact at all times, and that’s the only time real estate investing is mostly hands-off for an investor. If you’re willing to hire a property management company to oversee your property maintenance and care for your tenants, it might be a good side hustle for you.
2. Side hustles shouldn’t be high-maintenance
A side hustle is just that – a side hustle. Emphasis on the “side.” For a side hustle to be successful, it needs to be somewhat hands-off and part-time. It doesn’t necessarily have to be cheap or easy, but it can’t be something that requires you to invest a large amount of time, energy, or resources to make it work.
If you pursue a side hustle that requires a significant investment of resources or time, you’re unlikely to see it through. When you already have a regular job, another project that demands most or all of your free time will leave you exhausted and possibly burned out. Unless you can work two full-time jobs without issue, your side hustles shouldn’t be too demanding.
The harsh reality is that real estate investing isn’t easy, nor is it hands-off. The moment you buy a property, you’re on the hook for a host of expenses, including insurance policies, taxes, repairs, and more. The cost of owning property is high, and it takes planning, strategy, and skill to make it work. Then you have to think about managing your tenants, which isn’t fun. Most new landlords find out pretty fast that they don’t want to actually be a landlord. However, even when you have great tenants, you’ll be spending a lot of time and money on regular maintenance and repairs.
3. Side hustles should generate money right away
Of course, everyone will have a slightly different view on how fast a side hustle should become profitable, but real estate investing doesn’t really fit the bill for any reasonable amount of time. That’s because even though you can generate cash flow from a rental property fairly soon, it’s not going to be more than a few hundred dollars each month, and as long as you owe on your mortgage, that money doesn’t truly profit, and you don’t technically own the property. It takes decades to get out of debt when you buy property. A side hustle should be something that creates immediate profit and doesn’t require you to go further into debt.
The best side hustles will generate profit almost immediately, even if you need to build a foundation first. Some examples include driving for Uber, DoorDash, or starting an online business selling stickers. There are plenty of other options that can make you far more money, but these are just some examples that will bring you income rather quickly. You can absolutely start a side hustle that takes several months or even a year to build, but once you’re ready to launch, you should start generating a profit within a reasonable amount of time.
Be prepared for the long-term game
If you’re going to pursue real estate investing, don’t quit your 9-5 job. It’s not that you shouldn’t start an investment business on the side. It’s just going to take longer to get rolling and become profitable.
However, if you’re willing to put in the time and effort, it won’t hurt to pursue it as a side hustle.
