With property, the goal is typically to make money on your investment. Whether you are buying real estate and fixing a home up, renting out a place you already own, or want to get into the property business, there are a lot of ways you can make passive income in real estate. That’s the goal, right? Whether it’s your goal to make money on flipping property or renting it out for the foreseeable future, below are five smart ways to generate passive income from your property.
Rent Out the Property
Of course, the most obvious way to generate passive income from your property is to rent it out to someone else. This is especially advantageous when you aren’t paying a mortgage. You can find yourself in a position where you are making money from the rent and all of it is profit. When it comes to passive income, there are few better situations than to have money coming in on a property you fully own. Whether you are improving the house as you go along or already have a great situation, renting out a property is a great way to generate passive income.
Sell & Stay
Another more outside the box way to generate passive income is to sell your home and negotiate a deal where you still live in it. This is called sell and stay, or a residential sale leaseback. When you can’t afford to buy the house or keep up the mortgage but love the home you’re living in, you can create the situation in which you are able to continue living there. It’s one of the best compromises and ways to generate passive income. If you own the house, you will be able to generate passive income through the sale. You might even be able to hand over ownership and live in the house for free. It all depends on the situation.
Real Estate Investment Trusts (REITs)
A real estate investment trust is a mutual fund that offers individuals the opportunity to invest in the property sector while remaining completely passive. This is a great way to generate income if you have the money to invest. Typically, real estate investment trusts (REITs) are used for commercial properties. They can also fluctuate depending on the stock market, so these investments can be boom or bust. Still, if you know what you are getting into and have some money to invest, you can generate some great passive income.
Invest in Commercial Properties
Whether you use an REIT or not, commercial properties can be a great way to make some passive income. When you own office buildings or another form of commercial real estate, you can receive the rent check every month and do little when it comes to general upkeep. A lot of the time companies want to manage the space themselves, even if they are renting. Of course, you will have to be involved in property decisions but mainly you will be collecting a check every month. Commercial properties can be great for passive income that can be used for other things.
Put a Home on Airbnb
Another way to generate passive income with property is to rent it out temporarily. If you want to live in a property you own from time to time, you can rent it out on Airbnb or another platform. This provides the ability to generate passive income when you are out of town or staying at another property. You don’t need to do all that much to have your house on Airbnb. You can even charge a cleaning fee.
These five ways to generate passive income on property enable you to do other things with the money. Whether you are doing real estate full-time or are just making extra money from buying a house or renting yours out, these tactics can open the doors for so many other situations. You can use these opportunities to your advantage in multiple ways. Whatever your goal is, passive income is something you should look for from any investment. Real estate and the property business provide many ways to generate passive income and use the capital for other things. Let’s get started!