[evanjonr]

Yes. Passive income can initially take work to build the income source. Most people consider rent to be passive income, yet people don't just magically own houses, they more often than not work to buy them.

[_tom_]

Anyone that thinks renting houses is passive income has never done it.

Repairs, collections, advertising, evictions, etc.

[Shugarl]

...which are things you do every now and then, unlike a job, where you have to be there 5/7 days for a number of hours ?

[vidarh]

But all of this is something you can contract out to an agency for a cut of the rent.

[sokoloff]

That cut of the rent ends up being around all of the cash flow for a newly bought property, and in many markets ends up being more than the initial cash flow. It’s a second job with irregular on-call.

[vidarh]

Well, then you've leveraged too highly. Estate agents here take a fairly small percentage of the rent to manage all of this, so it takes a fairly small deposit before your rental income less management fees can't cover the remaining mortgage.

[sokoloff]

Property management companies in the US take somewhere in the 8-12% range. Is it dramatically lower wherever you are?

[vidarh]

Towards the low end of that, but even at 12% it just means you can afford lower leverage.

[skywal_l]

People do magically own houses. It's called inheritance.

[sokoloff]

Do you think houses are most commonly inherited or worked for?