Before you make passive income in real estate, you have to put in some work first. As much as the word “passive” tries to suggest that you can sit back and do no work at all, don’t take it literally, because you will get disappointed. The best thing is that once you get into the game, you will continue making money minus putting in a lot of work every hour. You can attempt to use passive income to supplement your main job, because your source of money will maintain itself.
Pick Up An Extra Property
If your credit score is good and the bank can give you a loan, you can go on the market and buy another home. It is best to wait till there is a slump in the real estate market before going for the property. The home you buy will generate income for you in different ways. You can decide to wait till the market stabilizes again then sell it off at a higher price. While waiting for the market to rebound, all you have to do is make sure the property is well-maintained.
A better option is not to wait for the market to stabilize, but rent out the property to paying tenants. This is highly beneficial because you will get some money to repay the loan and at the end of it all, you receive full benefit when the property is eventually sold. Buying an extra home and making money out of it is one way to make passive income in real estate.
If you identify and purchase a commercial building, you can lease out some of the rooms to different companies so that they can have their offices in your building. You will receive monthly payments in form of rent. This will help you pay back any loan you would have borrowed to buy the property. It will also give you extra money to invest somewhere else.
When you rent out a property, you will expect the rent rates to increase as time goes by while tax remains the same. You have no hand in increasing the rent rates at all, you only sit back and watch them rise. This increases your earnings steadily over the years.
Invest In Tax Lien
When you buy tax liens, you are committing yourself to paying someone else’s overdue taxes. You benefit by receiving a commission of up to 50 percent or more annually. If the owner does not meet the tax obligations plus the commission, he or she risks losing the property to foreclosure. As a holder of the lien, you will be able to get the property for the amount you paid as a tax lien. In case the owner of the property pays the tax amount, you get a big percentage on the amount as tax.