There can be no greater joy than to go to sleep and wake up richer!
What if I told you there is a legitimate, time-proven way to invest your money in real estate that does not involve constantly flipping houses or stressing out over your income on a daily basis? In real estate investing, it’s not just “location, location, location” that is the key to your success. Instead, open your eyes to the most laid-back way of generating investment income: passive real estate investing.
No matter how you slice it, every investment needs a strategy to empower it. Even the elementary school kid who sells lemonade on her front lawn has to plan how much the drinks and paper cups cost and charge enough to make a profit! Even if her parents pay the expenses, it’s an important lesson in planning for that kid when she decides when to set up shop outside in order to maximize the most sales possible.
Passive real estate is a simple, money-making machine that will grow your investment while you sleep, or take a vacation, or work elsewhere. Think of it as your secret second job; the money you rack up can be a boon for your future.
Here are the five master steps you should take in order to understand and strategize your passive real estate investments now.
Once you’re done with our handy guide, you’ll have no problems falling asleep tonight!
What Is Passive Real Estate Income?
How can any investment truly be passive? In real estate, there’s a niche for that! From rental properties to crowdfunding, check out your real estate investing options.
Passive real estate investing strategies are created so that, once you do your homework on what to invest in, you can make your investment and forget about it.
This is an investment strategy that works 24/7 without your active involvement. Passive real estate income investments open the door for you to toil away at your full-time career, or vacation 24/7, while you watch your financial returns grow with very little or even no input.
If you’re looking for cash flow with monthly, quarterly, or annual income, this is a great investment strategy for you to utilize.
The key to success here is to dive deep into research before you invest so that these laid-back real estate investment strategies can grow your money in the long term.
If you want to make money without stressing about it, you must first understand the basic facts about the real estate property that you’re investing in.
In a nutshell, passive real estate investing offers you a hands-off investor role. You will need to choose a proven, trustworthy, and specialized investment tool to participate in passive real estate investments.
There are a few major ways you can enjoy the benefits of this laid-back method of growing your income.
- Direct passive investing in a residential or business rental property
- A real estate crowdfunding group
- Real estate investment trusts (REITs)
- Real estate funds
As you can see, there are many ways to become a passive real estate investor. Luckily, today’s digital platforms can offer you in-depth information and opportunities with just a few clicks on your laptop, tablet, or phone.
But don’t rush into any of the splashy, informative websites just yet. You need to have an understanding of the products you may want to invest in before you actually commit to one strategy. Oftentimes, investors choose a variety of real estate investing strategies in order to get the highest return on their investments.
Here is a summary on what each of the passive real estate investment strategies entails:
Choices to Consider for Your Real Estate Investment Strategies
There are many real estate investment strategy options when it comes to making passive income, but which investment is right for you?
Let’s break down your options for a successful, proven plan of attack to choose how you’ll invest in real estate.
Direct Passive Investing
If you’re all about rental income, direct passive investing in a residential or business rental property may be the best option for you. Just make sure to remember to stick to a strong rental strategy and choose your property management well. With tenants paying monthly rent in the mix, a great property manager can make the difference between a positive and negative experience for any passive real estate investor.
If you want to make money while you sleep, this is a great way to invest!
Investing in a residential or business rental property is what most people visualize when it comes to passive real estate investment. Of all your options, this is the one that will eat up the biggest chunk of your time. It is truly not a “passive” investment strategy, but due to the availability of management firms to run your rentals, you can carefully create your own type of passive investment will little input from you once your experts are in place.
If you do invest in a residential or business property, it’s vital to have a management company run the property, manage maintenance, and collect rent for you. This way, you are not bothered by the day-to-day needs of your property.
You must do your due diligence here since the hard work in investing in rental properties is done by thoroughly researching the property, the selling price, the real estate taxes, the management company, and the rental income you can expect.
Real Estate Crowdfunding
This is an interesting option because it involves a group of investors that each contribute money to be part of the investment. With a large group of investors, you have an opportunity to participate in medium-size deals or even multi-million dollar ones.
Sometimes, real estate investors have done the legwork to find a strong real estate investment but need more capital to invest in the property. Crowdfunding is a way for numerous investors to pool their money for a real-estate project and sell it at a high profit.
There are many crowdfunding platforms online that will let you invest with as little as $500. Online transparent crowdfunding companies can work well for beginners or those wishing to dip their toes into the passive real estate investment pool. Whenever you invest via crowdfunding, you will be a part of a much larger investment, where your portfolio includes properties that are set up to generate consistent quarterly cash flow and upside potential.
Those who invest in real estate investment trusts (REITs), which include corporations, associations, and trusts, invest in income-driven real estate. Investors using this option do not need to spend money on the purchase or maintenance of the property and have lower risk factors. This is an option that will not impact your cash flow since you can be a first-time investor and spend very little to participate in REITs.
The fact that 90 percent of all REITs are taxable income as required by SEC law means you can expect as a shareholder to collect dividends. Being involved in REITs means you are protected by the SEC to receive your fair share of dividends.
REITs investors have lower risk factors because they enjoy diversification for passive real estate investors. The appreciation of the REITs properties can lead to profits and act as annuity type income for investors.
The cost is usually much lower than purchasing stocks, for example, and can be as low as $500 for a one-unit share of REIT properties, so that is a great bit of information if you are a first-time investor You can easily invest a small amount of money and learn firsthand how REITs operate.
Real Estate Funds
Real estate funds are also mutual funds but are invested only in real estate. Investors can benefit from being one of many in the investment while also reaping the rewards of growing returns from rental income property or other assets such as land.
Passive investors get the benefits of lower risk due to diversification and also a greater opportunity for higher returns. Investment property is a hot commodity, so don’t pass up your chance to work with real estate funds. Unlike single-family homes, real estate funds go a lot further by powering up your real estate investment strategy within specific funds.
Usually, the lion’s share of real estate funds is invested in commercial properties including both residential and business and land. This is a strong option for you if taking the long game is to your liking because your property including land will most likely appreciate in value over a few years, as your income rolls in from growing returns.
What Are the Best Passive Real Estate Income Investments Today?
In today’s difficult economic climate, the best real estate income investments are those that will grow in appreciation. Why? With so much uncertainty in the world, the stock market is volatile and changing by the hour.
Real estate is a traditionally tried and proven way to make money, and passive real estate investments are the most stress-free path to profitable investments.
Armed with the education and best matching tools to help you choose that perfect passive real estate income investment and growth, you will be sitting pretty in no time.
To help you deal with the dizzying number of passive real estate digital websites that seem to pop up every day, we’ve created a shortlist of some of our favorite online sites.
Which Passive Real Estate Investment Online Platforms are the Best?
Once you sort through the maze of passive real estate income investments and get a fee for which strategy works best for you, it’s time to understand which passive real estate investments are currently the best available. As with any investment, you need to check your facts and check again before you commit to a passive real estate income plan.
One of the most helpful investing realities in today’s digital world exists among the many simple-to-use online platforms, which can be extremely helpful in developing your own passive real estate investment strategies. Strong websites will offer education, customer service, numerous passive real estate investment options, and most important of all, transparency.
But just like your wide array of passive real estate investment strategies, when it’s time to choose your understandable, easy-to-activate, online investment tools, it can be daunting.
We made a list of the top passive real estate investing websites to consider when making your investment. With just a few clicks, your life as a relaxed real estate investor will begin. Be sure to check these sites in real-time since market conditions may change. Read their educational pages and compare real estate strategies on their online sites before you commit to your investment property.
Every real estate investment site offers different fees, design, and minimum investment requirements. Here are some online options for your needs.
1.) Fundwise – This online site has very low fees of 1 percent and allows a very low minimum of $500, so it will never hurt your cash flow! Their site is very easy to comprehend and offers a wonderful diversity of options to choose from for an appropriate package. These modern-day websites use AI, algorithms, and matching methods to find you the right passive real estate investments for your needs.
2.) Diversity Fund – This is a real estate fund that focuses on a REIT investment with real estate properties located in Texas and California. There are no fees and the minimum investment is low, at $500.
3.) CrowdStreet – With a diverse mix of stocks, bonds, and commercial real estate, this option may work best for anyone who can deal with higher risk and invest a minimum of $25,000. Their fee is 2.5 percent for investments.
4.) Mashvisor – We live in an Airbnb world, and Mashvisor knows it. Using their AI bells and whistles, this site to searches for the ultimate Airbnb properties you can invest in now. Their analytical program will turn your requests into specific investment ideas in fifteen minutes!
5.) Landorology – If you are looking to participate in specific rental properties, this site can hone in on your actual state laws, regulations, and landlord guides. It’s a great research tool.
6.) Small Change -This site offers the ability to participate in smaller passive real estate investments. They have no fees and minimums are determined by owners of individual properties.
Activate Your Real Estate Property Investments, Kick Back, and Relax!
By now you have graduated from our mini-course about passive real estate investment strategies. It’s time to choose your own plan and commit to your own investment property.
Starting a plan, no matter your choice is a monumental accomplishment.
We wish you great fortune, less stress in your life through smarter investing, and of course, a great night’s sleep!