4 Proven Ways To Earn Passive Income From Real Estate

Wouldn't it be nice to make extra income? Earning some cash outside your day job can boost your net worth and give you some much-need financial peace. A study has shown that finding a source of passive income is among the best ways to earn cash in regular intervals without putting in so much effort. A popular source of passive income is real estate. So, if you are interested in acquiring or renting out properties, here are some proven ways to earn passive income from real estate. 

1. Investing in Real Estate Investment Trust Shares (REITs)

Investing in REITs is one of the simplest ways to make passive income in real estate. REITs are comparable to mutual funds in that investors purchase shares, contribute money, and receive a monetary return. REITs are often publicly listed investments, making them available on major stock exchanges. They are also easy to purchase and can be quickly sold online. Your investment in a REIT is dispersed across a portfolio of real estate holdings. REITs are expected to return at least 90% of their earnings to shareholders in the form of dividends. They are often relatively easy to invest in, making them an excellent passive income alternative for many investors.

2. Mortgage notes 

Creating or purchasing a mortgage note is another way to generate passive real estate income. You can purchase performing and non-performing mortgage notes from other investors at a discount or use owner financing to create a note from your property. Most lenders utilise mortgages and notes to offer money to buyers for a real estate purchase. A promissory note specifies how debt will be repaid, while a mortgage protects the lender's property as security if the buyer defaults. Instead of taking out a regular loan, some home buyers prefer a home loan as a private note.

3. Real estate syndications 

Real estate syndications are different from REITs and do not involve investing in a fund. Instead, you purchase a single real estate property and own the asset. As a passive investor, you have more chances to improve your tax benefits as the owner of the real estate asset. Multiple investors can pool their funds to buy real estate in real estate syndications. The real estate syndication's general partner, or syndicator, locates a deal, handles the transaction and financing, and manages the investment once it is completed. However, you should learn about real estate syndication before taking this approach. 

4. Crowdfunding 

Crowdfunding is another alternative for making passive income in real estate. This method is similar to syndications as several individuals pool their resources to purchase real estate. However, real estate crowdfunding uses the internet and social media to reach prospective investors. One advantage of using crowdfunding is that you can begin with as little as $1000 to invest directly in the property. You also have the option to decide where to invest your funds. Investors can expand their portfolio risks by not investing their entire fund in the equity market. 

Everyone wants to make some good cash, even in their sleep. These methods mentioned above should help generate some cash from real estate without dedicating too much time or resources.