Earn Passive Investment Income In Real Estate In 2 Ways

Posted on: April 10, 2011

Categories: Other Articles, Profit

Author: lbuen

Fund Your Luxurious Retirement With Passive Investment Income

passive income Earn Passive Investment Income In Real Estate In 2 Ways

Passive Rental Income

Rather than enjoy a dip in the pool in a luxury cruise liner, many of today’s American retirees may find the need to dive back into the employment pool to make ends meet. A survey has shown that Americans now are not optimistic to retire comfortably. Some even revealed of having prematurely dipped from their retirement savings for cash. It seems relying solely on 401K plans are no longer sufficient. If you do not like the idea of still working like a Trojan in your 60’s or 70’s, consider looking for ways to earn passive investment income while your employment has not yet ripened.

3 Major Categories of Passive Investment Income

The IRS has sorted passive investment income into three categories: active or earned income, portfolio income and passive income. Passive income is income regularly earned with minimal effort needed to maintain it. This is usually taxable. Examples of passive income are royalties from books you have written and published, earnings from businesses you own but does not entail your direct participation and rent from properties you own. Let us talk about this last example.

Passive Investment Income in Real Estate

The real estate market is bursting with opportunities where you can earn passive investment income. While you can earn handsome profits by getting your hands dirty in real estate by buying, rehabbing and wholesaling properties; the income you will be earning is not considered passive since considerable effort and involvement would be required from you. However, there are ways of earning from real estate where you do not need to lift a finger, except when signing certain documents.

Become A Passive Investor. One way to earn passive investment income is to partner with a real estate investor in a real estate deal. Let him do all the work, while you fund part of or the entire deal, depending on how you discuss terms. You can be a plain lender where you agree to receive a certain fixed return for the money that you have invested, or you can also be an “investor” where  the return you receive will vary (by percentage) depending on how the deal turns out. There are  actually infinite ways of designing these deals between you and the active real estate investor.

Invest in A Rental Property. In the previous item, you earn passive investment income by investing in a real estate deal. Do not confuse this with investing in a property or properties. In this approach, you yourself will acquire the property and set it up to be rented out. Your passive income comes in as rental income paid by your tenants. This may entail some work at the start where you have to look for the property to acquire, secure a property investment loan and market your property to tenants. You will then delegate the task of managing the property to a property manager. The property manager can also look for and screen tenants for you, as well as oversee maintenance, rental collection and many others. All you have to do is meet the property manager occasionally to check on your investment and supply him your bank details where you want your passive investment income to go.

There are numerous ways of earning passive investment income. Becoming a passive real estate investor by investing in a deal or investing in a property can be lucrative ways of raking this income without much effort and involvement.

 Earn Passive Investment Income In Real Estate In 2 Ways
pixel Earn Passive Investment Income In Real Estate In 2 Ways

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