Passive income is great. Extra money is great, right? Making money outside of your day job can boost your wealth and provide you with more peace of mind. Real estate is a popular method to produce passive income through rental properties, but there are other ways. Here are some things you should know about using real estate as a passive income source.
What is Passive Income?
Passive income does not need active participation and requires little effort compared to active income.
The concept of time freedom has reached all corners of the world, as the internet has enabled people to generate wealth passively. Let’s say you invest an initial capital investment like Rs.1000 (or any amount), often in the form of a stock, and then acquire a stake in that investment; this allows investors to earn dividends or other regular income while they’re sleeping. You don’t have to put in those hours for active income.
Passive income allows you to supplement your normal earnings.
There are many other ideas available for passive earnings creation in 2024 such as affiliate marketing, creating digital products, selling online courses etc., but nothing beats real estate passive income.
What is Real Estate Passive Income?
Real estate passive income is earned by investing in a real estate project that someone else will manage or run, but it generates revenue for you. There are a few ways investors can go about their involvement including:
Buying shares in publicly listed real estate-related enterprises (real estate development businesses, huge real estate brokers or construction companies)
Real Estate Investment Trusts (REITs) which combine the funds of multiple investors so they can partake in large-scale real estate projects
And other investments
How To Make Passive Income Via Investing In Real Estate?
Passive streams of cash flow — such as rental homes — can be excellent methods to supplement present incomes and finance retirement years planning. Investors who do so wisely may earn dependable revenue from rentals while simultaneously fixing up the property and building equity.
It is often believed that passive income real estate investment requires little to no work. However, those interested in making money passively via property ownership should treat the endeavor as a business and take an active role. Whether it is finding properties, screening tenants, hiring a property manager or managing problems, owning rental properties does require some sort of commitment — especially if you’re looking to increase your revenue.
However, there are several more methods to invest in real estate with minimal participation but still earn consistent passive income.
REITs: REITs are a way for investors to contribute money and get paid. The most common type of REIT is publicly traded on big stock exchanges. A given REIT’s investment is spread across many different properties that it owns. In India, you can invest in a REIT for as little as Rs 10,000 or 15,000 with an Embassy Office, Mindspace or Brookfield offering yielding 7-9%.
Structured Debt: Structured debt is designed to let companies raise money from investors without diluting their ownership. And for investors who put up the cash, the high yield is secured by collateral. The four-year structured instrument pays monthly interest and returns 25% of principal every year. Assetmonk is offering an IRR of 17% with a minimum investment of 10L.
Real Estate Crowdfunding: Real estate crowdfunding involves a group of people pooling their money to buy one property. Single-property crowdfunding has become quite popular because it requires much less capital than buying an entire building outright. For instance Assetmonk lets you start investing at Rs 25 lakh.
Real Estate Syndication: A real estate syndication is when a group of investors pool their capital to purchase something together — in this case, a property. In this case, passive syndicate investors needn’t worry about any other aspect beyond funding their portion; everything else will be handled by the administrator or sponsor who organized it all.
Fractional Ownership: A fractional ownership deal allows multiple retail investors to own part of the same property by putting up proportionate amounts of equity. This kind of opportunity lowers your risk while also lowering your potential reward.
Bottom Line
So If You Want Passive Income Go For Real Estate Passive Income or Passive Income From Real Estate.
To get started reach out at Assetmonk.in Earn real estate passive income easily via fractional ownership (direct co-ownership) & real estate crowdfunding opportunities across institutional-grade properties in India with Assetmonk.
FAQs
Q1. How can I generate passive income?
A. Passive income is generated by putting your money to work for you, earning you more money over time. There are lots of passive income ideas out there but the most reliable way to earn passive income is to invest it in a commercial property so that it earns rental income and appreciates in value.
Q2. What is passive income in India?
A. Passive income is earned the same way everywhere: By putting your money to work for you and letting it earn even more money while you sit back, relax and enjoy your life.
Q3. Why is passive income important?
A. Passive income is the way to go if you want your wealth to surge or to just secure some money on the side.
Q4. Why do people call it passive income?
A. Well, when you make a passive income, you don’t have to put in much work for it. For example, if you invest some money into CRE fractional ownership, all you have to do is just that, invest. Someone else will run everything for you while you get paid with no sweat at all.
Q5. So… Is this type of income taxed?
A. Yes, passive income does get taxed but not in the same way as other incomes do!
