Mailbox Money: The Best Part Of Real Estate Investments

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Everyone probably has a different reason – or a combination of different reasons – why they’ve chosen to go into real estate investments. We’ve outlined some of these above by illustrating accidental landlords vs. professional landlords, but that is only part of the bigger picture. 

No matter what you chase after in life, you have to love it. Or, at least, you should love parts of it. For some people, the draw of real estate investments might be an opportunity to create generational wealth, have something to pass down to their kids or grandkids, or maybe they just love houses. For others, it’s about loving the project aspect of this business. Bring on the DIY and home improvement experts! 

I’m going to introduce you to a term I love, which is a big part of the draw for a lot of people – and gives people a lot to love about real estate investment. 

It’s called mailbox money. 

Jimmy Buffett has a song called “Mailbox Money,” which refers to getting a recurring check in your mailbox. In Buffett’s case, he’s talking about royalties, but for you, mailbox money comes from the monthly rent checks you receive from your investment properties. 

Regardless, mailbox money is a beautiful thing. 

• I want mailbox money from houses I’ve bought, rehabbed, maintained, and paid off from recurring rent checks – and I hope you do, too. 

You can think of this concept as an annuity, but it has some differences from life insurance policies and what you get from them. 

First, while there are certainly risks and areas that are out of your control with rental properties, you’re at the mercy of other people, the market, and someone else’s decisions when you get an annuity via a life insurance policy. 

When you have a rental property, you can see it, you can touch it, it’s there – and that’s valuable. If something happens to that property, it’s insured. However, one area where people are at the mercy of others is property management. Unlike other investments, being a real estate investor requires a little bit of elbow grease. You can’t just let it sit and do nothing except bring you that mailbox money. On its own, the property won’t generate income, but once you get a tenant into it, the checks will start showing up. 

• People talk about real estate investment as “passive income,” but in reality, there’s nothing “passive” about it. 

You can’t expect to generate income with an empty property, so you need to create an actionable plan and solid habits to do the work, manage your property – either by yourself or by hiring a team to handle it – and be realistic about budgets and expenses so you come out on top. 

Then, that mailbox money is even more beautiful – and it’s all yours.

Real Estate Is A Great Investment For “Do It Yourself” Investors

Now, this doesn’t mean you have to do everything yourself – and in many cases, you may not want to do that. Real estate investments are more self-driven than other types of investments, such as stocks or retirement accounts where you put money away by giving $50 out of every paycheck or allow someone else to invest a designated amount of money into the stock market – or you’ve already done that for yourself. 

However, some investors like to be more involved with the process, and real estate investments are more in line with that aspiration. 

You can be as involved as you want to be in real estate investments, so in some ways, it could be like one of those “set it and forget it” investments. If you want to do more, I’d still encourage you to have someone to call when you run into stumbling blocks, but if you want to do less, hire a property manager or property management team and go about your business. 

Some of my clients are doctors, lawyers, and other professionals who have full-time jobs. They can’t be as involved as other people may like to be, but they don’t have to be, either. If you’ve got the flexibility to do some of the maintenance and repairs yourselves, you may save money – but you also don’t need to depend on being able to do the work yourself to be successful. 

There’s tons of flexibility in real estate investments: Your level of involvement is a spectrum, and if you put a plan in place to ensure you’ve got the coverage and support you need to supplement the work you don’t want to do, you won’t have to worry about the problems that could arise by missing key details or cutting corners because you’re overwhelmed. 

Final Thoughts

Every investor has their own reasons for entrusting their money somewhere. Whether you choose to go all-in on stocks and bonds or choose real estate as the pathway to generate long-term, recurring wealth, you want to feel confident in your decision. At the end of the day, you want to feel like you’ve done the right thing. 

Mailbox money can change your life. To reiterate, real estate isn’t passive income, but mailbox money is a way to give yourself a steady stream of income that doesn’t require you to put in any more of your valuable time than you want to dedicate to a project. 

Get your hands dirty or don’t. Go halfway. Do whatever makes you feel comfortable and confident about your investment and allows your property to generate that income. 

Remember: Empty properties can’t generate money, but as soon as you get a tenant in there, the mailbox money starts showing up. From there, you’re going to want a team of professionals to handle the stuff you don’t want to do, but at the end of the day, you’re in control. 

To me – and maybe to you, too – that feels better than putting my money into other types of investments and hoping for the best.