Passive earnings include any kind of income generated without the investors’ active involvement. Passive income can come from rental properties, syndication projects, mutual funds, annuities, and other passive investment opportunities. As you can see, there are lots of options for creating this kind of portfolio, from index funds to real estate investments, but the most important aspect of generating income passively is looking for long-term instead of short-term gains and carefully creating your investment strategy.
In this article, we’ll be looking into the most profitable passive income investment ideas, with an emphasis on real estate investment opportunities, including syndication projects and real estate investment trusts (REITs). These low-maintenance investments provide regular dividends. On top of this, real estate tends to appreciate more over time when compared to stocks and bonds. So scroll down to find out more about how to start earning income passively as soon as possible.
Can You Make Money Easily From Passive Income Investments?
While nothing is guaranteed, you can earn a decent amount of money with smart investment choices. Stop looking for a fast solution and start working on your investment strategy now! Earning passive income is actually pretty easy. Just create the most effective investment strategy and stick to it.
The first thing you need to do is set clear financial goals. How much you wish to earn passively, how much money you have in your savings account, how much your regular income stream is, what your expenses are – put it all on paper so you can create the most optimal starting position for yourself.
When you know how much cash you have for the upfront investment, you’ll have less trouble building your portfolio. Make sure to take into account your risk tolerance and your end goals (or at least average monthly profit preference). Then, look into passive investments to find the best way to earn income for you personally.
Here are some passive income ideas to consider:
- Dividend stocks
- Rental properties
- Self-storage rentals
- High-yield savings accounts
- CD ladders
- Real estate investment trust
- Investing in a particular business
- Peer-to-peer lending
Whether you choose to invest in a rental property or put money in the stock market (preferably a fund with reliable, publicly traded companies), your goal is to generate passive income. Once compiled, your portfolio should be self-sustainable or managed by a professional. Don’t invest in something that needs to be actively run or monitored all the time. Just a bit more pre-planning will save you lots of time!
Is Passive Income Investing Really Hands-Off?
With an investment strategy that works, these investments can really be hands-off. Naturally, this also depends on the type of investments you’re pursuing and your knowledge in a particular industry. For example, if you’re looking into dividend stocks but don’t know anything about the stock market, you’ll need to put in a bit more work. Hiring a portfolio manager is also a good option, but this will leave you with a lower potential income.
Knowledge (or lack of) is the reason why people choose to invest in mutual funds, index funds, and REITs. Simply put, you don’t need to have in-depth knowledge to invest. Just provide the capital and see your investments grow over time. However, returns may vary, depending on market conditions.
Similarly, investing in real estate might require you to have some knowledge about the market, but you can also consult with professionals in the field to find the best passive investments. Rental income can often be higher than dividend-paying stocks or mutual funds, so it’s worth looking into all of your options prior to putting in the money.
Note that if you choose to invest in residential real estate, you’d naturally have to deal with tenants, which isn’t really “hands-off” investing. You would need a property management company to take care of tedious tasks, which could influence your desired cash flow.
For a real hands-off investment option, you’d want to look into commercial real estate. There isn’t any hassle with the tenants, especially if you invest in double or triple net leases. You’ll be generating regular monthly income while your tenants take care of taxes, maintenance, and other bills. Investing in the commercial sector might require a bit more money, but that’s why syndications exist. Nowadays, investors can pool their money together and invest in properties that would usually be out of their reach. The syndicator takes care of managing the investment (for a nominal fee), and you won’t have to do a thing.
Best Passive Income Investments
From the choices listed above, we’d like to discuss real estate investing a bit further. Not just because we’re real estate professionals, but because real estate can be the best investment option you’ll make! Real estate investing will help you to secure your retirement and open the doors to financial freedom. Soon, you won’t have to “work” at all because all your income streams will be passive.
This isn’t to say that real estate investing can’t be dangerous. Of course it can! You don’t have to look far to find market crashes and poor investment decisions. However, don’t be discouraged. If you know what you’re doing, real estate isn’t any riskier than stocks. Just make sure to always conduct due diligence on projects and carefully research your investing partners.
Real estate investing can seem like a lot to handle, especially for beginners. A lot of people just acquire one residential rental property and stop there. When the market conditions change out of their favor, they give up on real estate entirely and move on to index funds, mutual funds, or something more “secure.” But we’d argue that real estate can be just as secure in the long term if you play your cards right.
Here are our suggestions for passive real estate investments.
People will always need storage units, which is the main reason why it’s profitable to invest in self-storage. Essentially recession-resistant, investing in self-storage is the best decision you can make for your financial future. Self-storage is also the perfect passive investment for busy people. You don’t have to do much if you own a facility since tenants are renting the units by themselves! Almost everything in the industry is automated, so you’ll likely need just one facility manager to take care of the maintenance.
In self-storage, you can also join forces with other investors and become a partial owner of the units. This means you’ll make money easily while others do the legwork. This brings us to another form of real estate investment, which is syndication.
This form of crowdfunding, in which a group of investors each contribute money toward a project, can be quite lucrative. On top of that, joining forces with other investors and putting money in large commercial projects can help you earn money without any hassle at all! Multi-million dollar ventures are waiting, and you just need to find the best one. There are also lots of self-storage syndications, which means you can become a part of secure recession-resistant projects with little upfront cash.
Real Estate Investment Trusts
REITs can be a good option for very risk-averse people. These funds provide investors the option to invest in real estate without purchasing and maintaining an actual rental property. REITs are traded like stocks, and your income comes in the form of dividends.
There are three main types of REITs:
- Equity REITs that buy, own, and manage income-producing properties
- Mortgage REITs that loan money for mortgages and earn profits from interest rates
- Hybrid REITs that have both equity and mortgage investments in their portfolios
Turnkey Rental Properties
A turnkey property is a fully renovated rental that doesn’t require a lot of maintenance. While it’s still somewhat an active form of investing, you can hire a property management company that will maintain the property. The company will also ensure that the rental isn’t vacant for long, which leaves you with steady rental income earned passively.
Make More Than $1000 a Month with Passive Income Investments
Are you ready to become a passive investor and earn more than a thousand dollars passively per month from your portfolio? We’ll help you invest in real estate, with guided support every step of the way. You can become a part of a large community of investors, each willing to share their insights, new passive income ideas, and advice. We’re always looking for new partners to support our lucrative projects, so don’t miss out on the opportunity.
You can get involved as much as you like, from regular checkups to just relaxing while collecting cash flow payments. Once you contact us, we’ll discuss your goals to find the best investment option for you personally. Bolster your portfolio or start your career as a passive investor now! Apply here to get started.