Years ago, when I was working full time as a hedge fund associate, I was eager to boost my income and decided to take on a side hustle. Once I ramped up, I found that I was easily bringing in an extra $1,000 every month.
In hindsight, though, I realize I went about things the hard way. See, it's more than possible to go out and work more hours to boost your income. But if you invest wisely, you can earn what's known as passive income -- money that comes your way without you actually having to do anything.
Nowadays, I much prefer to go the passive income route. And if you're eager to do the same, investing in real estate is a good way to go. Here are a couple of choices for scoring $1,000 in passive income each month -- without having to hustle at all.
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1. Add an income property to your portfolio
These days, demand for rentals is strong because homes have gotten so ridiculously expensive to purchase. And if you buy an income property in the right market, you might easily net $1,000 in passive income each after accounting for your costs.
Of course, being a landlord is not easy. You need to manage tenants, address issues, and take care of maintenance and repairs -- which doesn't sound very hands-off.
That's why you'll need to buy an income property in a market where you can charge enough rent to cover your operating costs (things like property taxes, upkeep, and repairs) plus the cost of a property manager. The person you hire can oversee your investment property and take care of the many things you'd rather not be bothered with.
2. Load up on REITs with generous dividend yields
Years ago, I realized it's possible to invest in real estate without actually going out and buying property. And that's a route I prefer to take, which is why my portfolio is loaded with REITs, or real estate investment trusts. If you like the idea of passive income, I suggest you do the same.
REITs are companies that own and operate different properties, and they derive revenue by leasing out the space they have available. As with regular stocks, REIT shares can gain value over time.
But because REITs are actually required to pay out 90% of their taxable income to shareholders in dividend form, they tend to pay higher dividends than most companies. And so if you fill your portfolio with REITs, you might easily manage to lock in $1,000 a month in passive income.
Now to be clear, REITs do require some up-front legwork (the same way income properties do). You'll need to research different companies to make sure you're choosing the right ones to invest in. But beyond that, there's no further work to do.
Sit back and get rich
I used to think the idea of sitting back, doing nothing, and getting paid was a scam. Now that I've been investing for many years, I see things differently.
Snagging a steady stream of passive income doesn't make you lazy. If anything, it makes you savvy. And if you play your cards right, investing in real estate could be your ticket to meeting your financial goals without having to work hard on an ongoing basis.
