When Passive Income Becomes a Massive Headache: The Major Mistakes Landlords Have Made and What They Did to Correct Them

As seasoned investors will tell you, the phrase “passive income” is largely an oxymoron—like the term “easy money” or, for Brit transplants like me, the sentence, “I think England can win the World Cup.” Amid soaring expenses, small investors are learning the hard way that passive income often equals massive headaches. However, five years ago, it seemed like all investors had to do was lie back on a deck chair by the pool and watch the cash flood in. Post-COVID-19 pandemic, interest rates were around 3%, rents were soaring, and everyone wanted a piece of the residential real estate investment pie. “The rents [we could charge compared] to the cost of buying it were insane,” William Lemmon, an investor in Akron, Ohio, told Realtor.com. “So we jumped in on it.” At the time, in 2021, William and his brother Josh were buying homes for $60,000 and renting them out for $1,000 per month. A Passive Income Phenomenon As BiggerPockets investors know, that period was at the height of the real estate investing boom, when the BRRRR strategy for recycling money to buy multiple homes was in full swing. A Realtor.com analysis of Google Trends data found that search interest in “passive income with ...