Passive income is arguably one of the easiest ways to generate revenue and build wealth, providing you find the right opportunity. For many people, property is an attractive alternative investment option. With a variety of ways to invest in real estate, it’s even possible to generate passive income. For inspiration, take a look at these three ways to earn passive income with property now:
1. Real Estate Syndication
Joining a real estate syndicate allows you to invest in a property or development, without the hassle that usually comes with property ownership. From an apartment complex to a unique Spanish mansion, there are no limits when it comes to what types of property can form the basis of a property syndication investment. As a passive investor, you’ll supply some of the funds required to purchase property and an appointed syndicator will identify the right deal, manage the purchase and oversee the investment.
Generally, property syndications require you to commit the funds for a specific amount of time but they can offer high returns. However, they’re rarely marketed to the public and minimum investment criterion can mean you need a significant amount of funds to get started.
2. Buy-to-Let Property
Buy-to-let properties might not sound like an opportunity to earn passive income, but they certainly can be. Instead of attracting tenants, letting the property and managing the tenancy yourself, you can outsource these responsibilities to a designated property management company.
In fact, many property management firms do not offer wraparound services that cover every aspect of leasing a property; from Energy Performance Certificates (EPCs) and tenant references to maintenance and out-of-hours repairs.
Typically, investors will choose which property to invest in and handle the purchase process themselves, so there is some hands-on involvement as the start. However, this gives you the opportunity to maximise your future returns by being actively involved in launching the investment. Then, you can sit back and allow your investment to generate regular rental income and, hopefully, increase in value too.
3. Real Estate Investment Trusts (REITs)
Similar to mutual funds, investors buy shares in REITs with the intention of generating a lucrative return. While some REITs are managed by private firms, you’ll find that many are traded publicly on major stock markets.
As REITs are required to pay out at least 90% of their income in the form of dividends, it can be a savvy way to generate passive income as an investor. While most REITs invest in a range of properties, thus diversifying your investment, you won’t have any say over how your funds are used. By choosing a REIT that matches your investment goals and paying close attention to the small print, however, you can find an investment vehicle that suits your needs.
Are You Ready to Invest in Property?
All investments carry a certain level of risk, although some are more high risk than others. Before you consider how or where to invest, be sure to do your research and obtain professional advice, if necessary. By scouring the market and investigating all of the options, you’re sure to find an investment opportunity that’s right for you.