One of the main reasons why many people stay away from real estate investing is the erroneous assumption that making money from investment properties requires lots of time, effort, energy, and hard work — and this is not entirely true. Making money outside of your primary job is a great way to ensure financial stability and cover additional expenses. Real estate has several opportunities if you are looking for ways to earn passive income. As an investor, you can reap the dual benefits of appreciation from your investment and ongoing rental income.
Passive income real estate is a strategy through which an investor can create earning without having to be actively involved. It means investing and then earning money, through interest or dividends, without the active day-to-day participation of managing the property or investment.
Acquiring and managing real estate undoubtedly is an excellent way to earn income. However, interacting with tenants, handling paperwork and legal documents, staying educated on the real estate market, and maintaining the property requires being involved at all times – but there are still ways to invest in real estate without the day-to-day hassle.
A real estate syndication involves multiple investors pooling their capital to purchase a real estate asset. In these syndications, investors don’t have to be actively involved in property management, accounting or tenant-related issues. One of the greatest aspects of real estate syndications is the transparency in your level of risk, as you know exactly where you are investing and who you are investing with.
REITs are similar to mutual funds: investors buy shares, contribute money, and gain monetary benefit in return. REITs are required to return at least 90% of their income to investors in the form of dividends and are generally very easy to get involved in, making it a great passive income option. A downside to this investment is the lack of transparency and control on your investment because passive investors don’t have the opportunity to choose which real estate assets their investment goes into.
Similar to syndications, real estate crowdfunding is when a group of individuals pool their capital together to purchase a property. It uses the Internet and different social media platforms to reach potential investors. The main benefit is that you don’t need a large amount of money to start and you can choose which properties you’d like to invest in.
If you’re interested in making passive income through real estate and don’t know where to begin or have any questions, get in touch with Rivers Partners. We’ll be more than happy to assist you through the process.
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