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Why do most people who get into investing in real estate never achieve the financial freedom they dreamed of, why is it crucial to source properties outperforming the market and how do active investors move up to the next level of Real Estate Investing?


Active Real Estate Investing


Passive or active investing



As property investor you probably agree that properties are potential wealth-builders and excellent income producing investments in the long term. Also true, those investments go through the same kind of cycles as other investment classes, which means that long term average returns take into account periods of very high growth and periods of property value stagnations for years.


These periods of  value stagnations and even more dropping values affect passive investing very much.  That is why passive property investors struggle to build a larger property portfolio, as illustrated in this blog post. The  shortage of income from day jobs and the limitation of resources like time are reasons why most people who get into investing in real estate never achieve the financial freedom they dreamed of.


To overcome that deadlock situation some investors try desperately to increase the cash-flow by pushing up rents or stepping up on the career ladder. Either way if you want to build a large investment portfolio and real wealth, it will be absolutely crucial to buy property that outperform the market, release capital gain to buy real estate in numbers and move up to the next level. The next level is becoming an active property investor.



What do active investors differently?


The brief answer is active investors are like entrepreneurs building businesses. Building a large property portfolio, a landlord or property trading business requires excellence (knowledge and skills) at what you are doing in order to make good money.


For running a business you build and manage a team of professionals not only for passive returns, but also for income streams based on services. You control your “business” for making money regardless of market conditions or direction the market moves.


Active investing is more work, the reason why it is not for everyone. Only who understands that the wealth building business is about return on capital, and who is willing to spend extra effort  on investment strategies will be able to manage a real estate portfolio. Cumulating actively wealth is not how much you save from your income, but how much your investment earns and how long it compounds.



Why is active investing not for everyone?


Think about , active investors need to have a certain personality. You will likely fail to put entrepreneurs, landlords or property traders in boxes because the true number of active investment strategies is virtually limitless.  Actually it depends on your imagination.


Active investors grow their business strategies based on individual knowledge, skills and experience and do not rely on savings. A business is an individual adventure, maybe a landlord business, or a property trading business, or just a property portfolio with sufficient cash-flow to support a full-time investor.



To sum up


Compare and read here again, passive investors (and of course home owners) pay for services only to get passive income. That concept is strongly supported by the real estate industry because — that is their source of income.


Active investors are willing to spend that extra effort to break free and manage wealth building as result of “return on capital”.


Active investors love to work with people, spend all energy needed to be knowledgeable about rules, laws & regulations and to manage a business in their field. Being conversant with roles played by the media, politics and policies affecting the market sentiment, is necessary to lower the risk in real estate investing and introduces elements of knowledge in skills that passive investors don’t have.



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Klauster Blogs lead to a real person who worked as computer network architect for many years in different countries until retiring from IT and mastering a life as property investor and landlord.


The passion of sharing experiences comes from turning hobbies into income streams and business.  Helping people to avoid pitfalls and to be free to choose has been satisfying and most rewarding.


The philosophy to treat life, partnerships and hobbies as an investment has helped people in our circle. Life is a dream with a deadline, happiness comes from making the right choices and having realistic expectations.


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Active Real Estate Investing