Landlording Sucks & Rental Income Isn’t Passive — Do This Instead

The Big (And Real) Picture on Being A Landlord:

• • Despite popular belief, owning rental properties requires significant time and effort. Michael Raki, with over $300 million in real estate transactions, highlights that landlording involves deal sourcing, financing, renovations, permits, tenant management, and unexpected issues long before rent checks arrive. The “passive income” ideal is often a full-time job in disguise.
  • Unlike stocks, real estate demands hefty upfront capital—typically $50K–$100K just to enter a deal—and ties up that cash for years due to illiquidity. If an investor buys at the wrong price or underestimates costs, the financial repercussions can be severe. 
  • Instead of self-managing properties, Michael recommends investing passively with experienced operators. This approach leverages the expertise and networks of seasoned professionals while avoiding the burnout and time commitment of DIY landlording. It allows investors to earn real estate returns without sacrificing their time or peace of mind.

Most people believe owning rental properties is the ultimate path to financial freedom—a low-effort, high-reward way to generate passive income. But the truth? It’s a lot more work than the glossy Instagram memes and YouTube gurus would have you believe.

In a recent conversation between the host of Spark Rental and commercial real estate investor Michael Raki, we peeled back the layers of what landlording really looks like behind the scenes. With over $300 million in real estate transactions under his belt, Michael knows a thing or two about the difference between real real estate investing—and a full-time job disguised as “passive” income.

The Myth of Easy Money

Let’s start here: landlording is not passive.

Sure, you collect rent checks. But between sourcing deals, financing, renovations, permits, inspections, tenant issues, and property management—there’s a mountain of work involved.

Michael put it simply: “People vastly underestimate how much goes into just getting those dollars into your pocket.”

Before you ever see a dime in rent, you’ve had to:

• • Find a good deal (often off-market and below value)
  • Secure financing

  • Pull permits and manage renovations

  •  Deal with contractors and housing inspectors

  •  Handle tenants or hire property managers

  •  Weather delays, headaches, and unexpected cost

By the time the rent rolls in, you’ve already committed months of time, effort, and money—and that’s before anything goes wrong.

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Real estate investments? Awesome.

Being a landlord? Less fun.

Learn how to earn 15%+ on passive real estate investments in our free video course.

It’s Capital-Intensive and Risky

Unlike stocks, where you can invest a few hundred dollars and exit at will, real estate locks up your cash. Michael pointed out that just entering a rental deal usually requires $50K–$100K between down payment, closing costs, reserves, and repairs.

Add to that the fact that real estate is notoriously illiquid—it costs money to buy and even more to sell. This means you often need to hold onto a property for years just to break even.

If you buy wrong, the consequences are brutal. As Michael said, “That’s where I hear the worst horror stories coming from.”

The Time Tax No One Talks About

If you’re handling your properties yourself, your time becomes the hidden cost. One of the most eye-opening moments in the episode came when the host shared how moving abroad made him realize just how much his own labor had been propping up his rental portfolio.

Once he couldn’t physically be there to manage issues, the returns dropped. And with that came a bigger realization: your time is valuable—and landlording consumes a lot of it.

So What’s the Alternative?

Michael advocates for a different approach: investing passively with seasoned operators.

Instead of trying to become an expert in every aspect of real estate, consider partnering with people who already are. By doing so, you get access to their years (or decades) of experience, their professional networks, and their proven track records—all without burning yourself out.

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Join Our Co-Investing Club For Hassle-Free Real Estate Investing

Want to enjoy the potential of passive real estate without having to buy real estate? Invest with our exclusive Co-Investing Club at SparkRental! 

Our unique platform allows members to collaboratively evaluate and invest in diverse real estate opportunities, including private partnerships, notes, syndications, equity funds, and secured debt funds. 

With a minimum investment of just $5,000 per deal, our club removes traditional barriers, giving you access to high-yield real estate ventures that typically require $50,000 to $100,000 for individual investments. 

At SparkRental, our Co-Investing Club prioritizes diversification across various property types and geographic locations throughout the U.S. Our carefully selected investments span multifamily units, mobile home parks, self-storage facilities, short-term rentals, and more, aiming for average annualized returns of 15% or higher on equity investments and 10-12% interest on debt investments. 

Each month, our members join interactive video calls to discuss and vet new opportunities, ensuring everyone has a say. 

Best of all, you don’t need to be an accredited investor to join our club!

Whether you’re a seasoned investor or just starting out, our Co-Investing Club offers a streamlined, community-oriented pathway to passive income and financial growth.

Final Thoughts: Don’t Confuse Ownership with Freedom

The bottom line? Landlording is a business, not a side hustle.

If you’re not prepared to treat it that way—if you don’t have the time, resources, or risk tolerance—it could end up costing you more than it makes. Passive income is still possible through real estate, but it often comes from passive investing, not DIY landlording.

As Michael said, “Most people make their money from their jobs or businesses. Learning to be a real estate investor on top of that is like learning a whole new career. And it can steal time from the things that matter most—your health, your family, and your peace of mind.”