Making money while we sleep is everybody’s dream. If your effort has made it possible for you to increase your savings, investing in real estate is always a great idea.
Real estate has forever been a place where investors put their money. Even nowadays, in spite of all the available options, it might be what you want to do too. There are a few different ways to generate passive income with real estate:
1. Purchasing rental properties
If you're ready to invest in real estate on your own you're entering the big leagues! This is where some real passive income can be made if it's done right. Owning a property is an investment that always pays off.
Are you thinking that renting a house is not passive at all? Take into account that property managers can do all the work for you if you want. They are the key to making money with no effort. If you find a person that is responsible and can manage your property well, you can relax and focus on finding more investment opportunities.
2. Crowdfunded Real Estate
If you want to invest in real estate but you don’t have enough money for a property or don't feel like going at it on your own, one option you have is to invest in crowdfunded real estate.
This type of real estate is a relatively new method, which utilizes crowdfunding to raise capital for real estate investments. It is possible to invest in a wide variety of properties without having to deal with mortgage brokers, real estate agents or contractors.
Real estate crowdfunding uses social media and the internet to connect investors to property investments that offer companies access to capital that they might never be able to raise.
This is how it works:
1. A company finds a real estate opportunity
2. A group of investors pools their money together to fund the project
3. Any profit generated by the project is then distributed among the investors
This type of investment is a good idea, but you must do extensive research on each deal before investing. There are good deals, average deals, and bad deals
A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. This is another way to get into real estate investing without all the risk of doing it on your own. REITs can add stability and diversity to your overall investment portfolio with very little money and are a great alternative to owning real estate directly.
The profits typically come from rental or interest income and the company must distribute at least 90 percent of its taxable income to its shareholders each year to qualify as a REIT