My Fundamental Principles for Generating Passive Income After Years of Investment

New investors frequently ask: “Which types of properties should I consider when selecting rental properties?”.

Real estate investing begins by setting goals; every decision made during real estate investment must align with these goals.

Most investors strive for financial freedom. But financial independence goes beyond simply replacing your income; it involves maintaining your lifestyle throughout life. In order to do this, passive income that meets three requirements must be generated:

Rents must exceed inflation: To achieve financial freedom, your rents must outstrip inflation as this erodes purchasing power over time. Population growth is one of the primary drivers behind rents and prices.
Income Persistence: Financial security demands that your income persist for life, tied closely with the future economic prosperity of the city where you invest.
Income Reliability: Rental income must remain reliable even in times of economic difficulty, which depends on tenants remaining employed despite any economic downturns.
The Rental Process
Property selection involves three steps, as illustrated here. First is selecting an investment location or city.