Real estate is an excellent option for business-minded individuals and investors looking to make some passive income. In a recent market report, the industry accounted for $11.4 trillion in market value. That means plenty of opportunities to get in on the trend and start earning a profit with minimal effort.
When done right, you can earn money without putting in much work. Here are innovative ways to make passive income in real estate:
Renting Out Properties
One of the most common ways to make money in real estate is by renting out your properties. This strategy does not involve much work on your part and can be a great way to earn some extra cash flow each month.
You can do this by renting out a room in your house, an entire apartment or unit, or even commercial space. The key to this method is to find tenants who will pay rent on time and take good care of your property. Screening tenants and having a solid lease agreement can help you avoid headaches.
You can earn a steady income without day-to-day responsibilities by renting out your properties. Thus, making it an ideal option for those looking for an easy return on their investment.
REITs
Real Estate Investment Trusts, or REITs, are another way to invest in real estate without making much effort yourself. With REITs, you’re investing in a company that owns and operates income-producing real estate properties such as office buildings, apartments, warehouses, etc.
Basically, you’re buying shares of a company that owns and manages real estate. That means you can get exposure to the real estate market without purchasing or managing any property yourself. And, since REITs must pay out at least 90% of their taxable profits as dividends to shareholders, they can offer some great opportunities for dividend investors.
One thing to keep in mind with REITs is that they can be volatile, and there’s always the potential for losing money. But if you’re careful and do your research, investing in REITs can be a great way to make some passive income from real estate.
House Hacking
Another way to make money from real estate that not many know about is “house hacking.” It involves buying and living in a property while renting out extra rooms to tenants.
This method can be a great way to earn a passive income because you’re essentially living for free while someone else is helping you pay your mortgage. And if you live in an area with high rent prices, house hacking can help you save monthly income while still earning from your property.
However, house hacking is not for everyone. It can be a risky business, especially if you have unruly tenants. But if you’re up for the challenge, it can be a great way to make money in real estate.
Real Property Managers
Many investors prefer not to deal with the tasks of being a landlord. If that’s the case, you can always hire a property manager to take care of your rental property.
A property manager will screen tenants, collect rental income, handle repairs, and take care of other details related to your rental property. This hands-off approach can be ideal for those who want to earn from their investments but want to focus on different areas.
Most reputable property management companies offer a percentage of the monthly rent as their fee. It can range from 5% to 12%, depending on the company and the services they provide. While this might seem like a high expense, it’s important to remember that a good property manager can save you time and money in the long run. They can also help you increase the value of your property and make it easier to sell when the time comes.
Flips/Developments
If you have some construction or development experience, flipping houses or developing land might be the perfect way to make passive income through real estate.
This option involves more work than others on this list, but it can also be very lucrative if done right. And if you enjoy the tasks involved, it might become a full-time job. All you need is some capital to get started.
Either way, flipping houses or developing land is one way to make some serious cash from real estate.
The above are just a few ways to make passive income through real estate. If you’re considering investing in real estate, researching and finding the right opportunity for you is key. And if you need help getting started, plenty of resources are available. No matter what route you choose, making passive income from real estate is possible with the right approach.
