Real Estate Industry

Make a Salary From Your Couch: How to Make Passive Real Estate Income

Aerial view of neighbourhood

How can you make money in real estate? If you watch enough TV, you’ll find entire channels dedicated to the topic.

There are house flippers, investors, and agents, all making a killing in real estate. You can become one of them if you’re smart with your investments.

Creating a passive real estate income isn’t easy, but it is possible. It’s also one of the smartest investments you can make. Real estate investing is a much safer investment, especially compared with the ups and downs of the stock market. 

Read on to find out why real estate investing is a smart move and ways you can earn a passive real estate income.

Why Invest in Real Estate

Why Invest in Real Estate

There are so many places to put your money and let it grow. There are stocks, mutual funds, bitcoin, binary options, and forex. Some promise riches in a hurry. Read on to find out why real estate makes the best investment for you.

Long Term Growth

A lot of investment vehicles promise that you’ll get rich quick. That’s not the case in real estate and anyone who tells you otherwise is selling snake oil.

Real estate investing is all about long term growth. Your investments payoff in years, not weeks like what a lot of people promise.

Pay Fewer Taxes

One of the best things about real estate income is that there is a load of tax incentives that come with it. Some investors with a rental property could qualify for a 1031 exchange, which means they can defer the capital gains taxes as long as they roll the profits into another investment property.

Predictable Investment

The real estate market tends to lag behind the rest of the economy. If the major economic indicators say that the economy is slowing down, you’ll know that will trickle down to the real estate market in a few months.

That gives you an opportunity to prepare for the slowdown. With something like the stock market, the bottom could fall out in a day with little to no warning.

Passive Real Estate Income

Do you see yourself working a 9-5 job for the rest of your life? It’s hard to fathom, but there is a way out. Real estate investing does afford you the opportunity to get out of the daily grind and earn a passive income.

It’s not always easy, but it is possible. You need to be dedicated, willing to absorb risk and take a few losses. Real estate investing isn’t for everyone, but you can make it work.

Townhouses

Ways to Invest in Real Estate

Once you understand why you want to invest in real estate, you want to jump in right away. There’s nothing wrong with that at all. These are just a few of the ways you can create a real estate income.

Rental Properties

Buying property and then renting it out is one of the most popular ways to make a passive income through real estate.

You do need to have knowledge of landlord-tenant laws in your area and you need to have your properties always rented out to make a profit.

Be a House Flipper

There are more people flipping homes than ever before. At the same time, they’re seeing smaller returns on their investments.

How would you like to be the next house flipping TV star? There seems to be a new house flipping show every day. These house flippers are showing the bright side of creating a real estate income.

They don’t always show the challenges that come with it. You need to understand so much about real estate like the home’s potential and what renovations will increase the home’s value.

House flippers are also subject to the capital gains tax on their profits. Short term sales usually don’t qualify for a 1031 exchange.

Crowdfunding

If you don’t have a lot of money to invest right now, you can get started in real estate investing through crowdfunding. Realty Mogul and Fundrise are two sites that offer the opportunity to invest in commercial real estate projects and real estate investment trusts.

These have a low barrier of entry, so you can be a real estate investor with only $500.

Real Estate Loans

You can leverage real estate loans in one of two ways. You can lend money to other people who want to be a landlord and buy a rental property. They’ll be responsible for finding tenants and maintaining the property.

The other way is to borrow money from these real estate investors to become a landlord yourself. This could be an easier option to get financing than traditional banks. You can also  

Invest in a Real Estate Business

One creative way you can create a passive real estate income is to invest in a real estate business. There are publicly traded stocks of homebuilders like LGI Homes and DR Horton.

There are smaller businesses like local contractors you can invest in as well.

Do Your Homework

Do Your Homework

Real estate investing isn’t something that you just do, like gambling at a casino. It does require specific knowledge to be successful.

You want to weigh the pros and cons of real estate investing because it does mean that you have to make a real commitment to making it work. You then have to figure out things like financing and being a landlord. You can read more here to learn more about that.

Luxury condo buildings

Create Real Estate Income

There are plenty of ways to invest your money. None offer the security and predictability like real estate does. A passive real estate income also has a lot of tax benefits that most people with a 9-5 job can only dream of.

You can find a number of ways to invest in real estate, whether that’s through renting properties, flipping homes, or real estate related businesses.

No matter what vehicle you choose, you’ll want to learn as much as you can about them before investing.

For investors who flip or sell homes, you’ll want to read this article to learn how to sell your homes faster than lightning.

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