Real estate has always been a place where investors put their money and even nowadays, with all the economic turmoil that is still present, it might be what you want to do too. Post Covid-19: Can you make money, effortlessly, with real estate?
Making money while we sleep is everybody’s dream, so if your effort during the last year has made it possible for you to increase your savings, or if you are still out of a job and want to use the money you were paid when you were laid-off to generate an income, investing in real estate may be an option to look into.
Covid-19 affected real estate in many different ways and though things seem to be slowly getting back to normal, there are changes that may be permanent and should be taken into account.
The months of lockdown and the possibility of remote work have made people choose single-family housing, move out to the suburbs, and choose places with lower taxes and population, for example. Studying these new preferences and trends will help you understand where the profit may be.
If after looking into all these changes, you feel you are ready to invest your money in a property, 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 are 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. The important thing is to analyze the new trends brought on by the pandemic to be sure what to buy.
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 is how it works:
- A company finds a real estate opportunity
- A group of investors pools their money together to fund the project
- 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, for 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.