What if there were a way for you to sit back, do nothing, and watch money continuously flow into your bank account? I'm not trying to scam you -- promise.
There are numerous ways you can generate passive income, and investing in real estate is one of them. And if you're willing to take on the risk of owning income properties, you can enjoy a steady income stream -- without having to lift a finger.
Get ready to watch your savings grow
These days, the housing market is pretty much out of hand. Inventory is sorely lacking, and home prices are through the roof. And recently, mortgage rates started climbing, making it even more difficult for everyday buyers to purchase a home.
But if you're sitting on a pile of cash, it pays to consider buying a home and using it as a passive income source. Because the housing market is so tough to crack, the demand for rentals has soared, and landlords today are able to command higher rents than usual. And so, if the idea of earning $1,000 or more per month in passive income sounds good to you, the solution could boil down to scooping up an income property in a market where rental demand is strong.
Now, you may be thinking, "Hold on a second. Being a landlord isn't exactly passive work." And that's true.
Being a landlord is actually quite difficult. You have to deal with tenant issues, oversee maintenance, arrange for repairs, and manage a whole lot of money. That could definitely be time-consuming.
But if you outsource your landlord responsibilities to a property manager, you won't have to deal with any of that. Instead, you can simply sit back and wait to collect your money without the hassle.
Is owning an income property right for you?
To be clear, owning an income property is not without risk. For one thing, if you buy a home in a market that's oversaturated with rentals, you could end up with periods during which your home sits unoccupied. Furthermore, your property manager can do a great job of vetting tenants before signing leases. But if a given tenant stops paying rent or causes damage to your property, you could be out some money.
There's also the cost of maintaining a home to consider. In time, your property taxes and insurance costs could rise, making it harder to churn a profit.
Despite that, many real estate investors enjoy great success owning income properties. And if you like the idea of generating large amounts of passive income, then it's a route worth considering as well.
That said, if you don't have the stomach for owning an income property, you can always approach real estate investing from another angle, loading your portfolio with REITs, or real estate investment trusts. Granted, you'd need to own a fair amount of REIT shares to generate $1,000 a month in dividend income alone, but it's certainly possible if that's an avenue you feel more comfortable exploring.