Passive Income In Real Estate
What Is Passive Real Estate Investing?
A passive real estate investment doesn’t require extensive effort from the investor to maintain. There are a few different ways to invest in real estate passively, including real estate investment trusts (REITs), crowdfunding opportunities, remote ownership, and real estate funds.
With these types of investments, you can make extra income without having to do any physical labor or act as a landlord. Some of these methods, such as investing in a REIT, are similar to investing in mutual funds – meaning you, as the real estate investor, can earn some extra cash on investments without having to buy properties yourself.
What Is Passive Income From Rental Property?
Creating passive income in real estate usually involves buying a property and renting it out to tenants. Managing rental properties can be an excellent way to earn money. Why is rental income considered passive? Because the IRS says it is. It’s grouped with income streams like royalties and licensing. And it’s a good thing for real estate investors, because it allows them to avoid the self-employment tax.
Why achieve financial freedom?
Being liberated from your finances has varying meanings to different people. For some, this could be nothing more than being able to pay your bills on time or going on an annual vacation to Disney with your family.
Others Define Financial Freedom As.
- Being debt-free — or at least working towards eliminating your debt.
- Having at least 3 months of expenses saved, aka an emergency fund.
- Saving for long-term goals, mainly retirement.
- Being able to treat yourself responsibly.
- Not losing sleep over financial concerns.
Benefits of Passive Income
- You can start investing in real estate passively even if you don’t have a lot of money to invest right away. If you were investing actively by yourself, you likely wouldn’t be able to invest in an entire building complex by yourself – but by crowdfunding or investing in something like a REIT, you can.
- Likewise, you don’t have to have extensive investing knowledge to get started investing passively in real estate. You can invest in something like a REIT or real estate fund without ever having to worry about knowing how to manage an investment property.
- Passive real estate investing offers better liquidity than active investing and will take up less of your time, since you don’t have to manage the property yourself.
- There is usually no physical labor or work involved with passive real estate investing – you simply invest your money and watch it grow. No flipping houses, no collecting rent.
Passive Can Be a Win in Investing
Passive real estate investments can be a good way to earn a steady stream of cash. All without having to toil over renovating a property or worry about managing real estate yourself. That said, these investments aren’t for everyone. More active investments such as flipping houses may appeal more to some investors.
About The Jackie Jackson
Become a Real Estate Rock star! You can learn about real estate investing with The Jackie Jackson. Jackie is a Real Estate Coach and Full-time Real Estate Investor. She boldly teaches new and seasoned investors how to Reprogram their thinking and rewrite their money story. So they can also easily and effortlessly experience the confidence they need to max-out their money-making potential without fear, guilt or shame while investing in real estate. Keep up with news, guides, and upcoming events with The Jackie Jackson!
