They say ‘time is more valuable than money,’ which is why passive income is essential. If you love the idea of not working and making money, then this is for you. You can make money when you are in the gym, doing groceries, and even when you sleep. It is perhaps the most popular method to create passive income when earning money via real estate investing. For most people, generating money while they are sitting on the beach might seem intriguing. However, doing so with this method involves a lot of work.
Unfortunately, people are only aware of one way, and that is through rental properties. Over the years, the real estate sector and the financial market have drastically changed. In this article below, I will walk you through a few ways proven helpful for those who want to make passive income through real estate. So, how will you earn passive income through real estate investing? Do you have any idea in mind? If not, then here is a quick list for you to check out.
Investing in rental properties has to be one of the best ways to bring in a monthly income. The process is straightforward. As the name suggests, you need to purchase a property and then have it rented out. However, it is not as easy as it seems. Depending on what your goals are, you can invest in rental properties. Whether you want to purchase a house or an apartment, you will look into your goals first. If you are going to invest in this method, keep in mind that it is the most costly and profitable. You will require a good credit history and a lot of capital.
Publicly Traded REITs
The second best option is to put money in REITs or Real Estate Investment Trusts. With this method, you will benefit from commercial real estate investment and the advantages of capitalising on a publicly-traded stock. To be precise, REITs have demonstrated a historical track record of giving investors dividend-based income, good market performance, liquid investment, transparency, inflation protection, and portfolio diversification.
Real Estate ETF
A real estate exchange-traded fund (ETF) is another preferred method of earning cash flow. This method will get competitive dividend returns while diversifying your properties across multiple commercial real estate properties. Therefore, instead of buying individual shares of one REIT, an expert fund manager regulates which REITs to put money in when you invest in a real estate ETF. For this, he uses investors’ money to purchase groups of REITs.
Real Estate Crowdfunding
In recent years, crowding has drastically changed the real estate investment landscape. It has become one of the significant ways of earning passive income because it has offered access to great investment deals even to average investors. If done right, investors can “have it all” by putting money in real estate crowdfunding. With crowdfunding, they can access different property types – hard assets that won’t vanish. But for this, you will have to create an account inside a crowdfunding platform. After you are verified as an investor, you can passively participate in funding a real estate property with other investors pooling their funds together.
Finally, one of the most recommended methods of earning passive income is to invest in corporate bonds of real estate companies. This method of investment in companies and government is also called fixed-income because investors get fixed interest payments, typically two times a year, until the loan expires. Corporate bonds can diversify portfolios and offer a higher income return than term deposits and government bonds. It is essential to know that investors receive an outstanding amount back after the load is matured. They can then use this money to reinvest in other bonds. Therefore, it will not be wrong to say that bonds hold the highest potential of earning a passive income from the investments, requiring almost no time to manage.
Real Estate Investing Technology
Busy people can invest in real estate with the help of technology and earn passive income. Real estate investment companies provide hybrid investing platforms through easy-to-use mobile apps. These platforms combine commercial real estate investment growth potential with savings account liquidity. Taking advantage of real estate investing technologies can make this investment accessible to all types of investors.
If you plan to invest in real estate, you can start with minimal investment and a bank account. Hybrid real estate investing platforms allow investors to withdraw their investment anytime. Like other forms of investments, investing on a hybrid real estate investing platform doesn’t have any guarantee of returns. So, investors need to choose a platform that invests in low-risk real estate assets like collateralised commercial real estate and fixed-income residential real estate loans.
Aspiring investors can generate passive income through smart real estate investing without necessarily acquiring and managing properties themselves. You can take advantage of other real estate investing options such as real estate investment trust (REIT), crowdfunding, corporate bonds, and investing your money into a hybrid real estate investing platform. Indeed, real estate investing is more convenient, flexible, and profitable nowadays with the proper knowledge, techniques, and real estate partners.