Are you interested in learning more about how to earn passive income through real estate investing? If so, you’ve come to the right place.
In this article, I will share with you several strategies that you can use to start earning passive income through real estate investing, even in 2020, as the world has been marked by coronavirus.
How to Earn Passive Income Through Real Estate Investing
What is passive income? It’s an investment that comes in on a regular basis without you having to do any work to earn that income. Some of the best ways to generate passive income through real estate investing include the following.
Private Equity Fund – One of the great things about investing in real estate is that there are a wide variety of ways to earn passive income through real estate investing and one of the first places is by investing in a private Equity Fund.
What is a private Equity Fund? It’s a collective investment fund which pools money from many investors so that the money can be used to invest in real estate. These funds typically consist of a variety of different passive income ideas and real estate Investments which offer investors the benefit of diversification across a different real estate holdings.
The great thing about investing in a private Equity Fund is that these funds are typically managed by managers who are experts at how to make passive income and they understand the ins-and-outs of the market, including underwriting standards, and due diligence.
Unlike other Investments, private equity funds may require a high invested minimum to get started, but they’re also liquid Investments, formed by institutional investors, and are one of the best ways for people to get started with investing in real estate, especially if they have the goal of earning passive income.
Real Estate Investment Trust (REIT) – Another great way to start building passive income through real estate investing is to invest in real estate investment trust. These are typically passive income streams of real estate Investments which produce income and by law they are required to distribute 90% of their earnings to investors.
Most people typically choose real estate investment trusts as their way to get involved with earning passive income in real estate investing, and as of 2020, there are an estimated 70 million people in the United States who are actively involved in REIT’s.
Unlike other Investments, real estate investment trusts have to follow very strict compliance standards and they also must abide by the highest standards and there are two different types of REIT’s that you can invest in, including traded and non-traded REIT’s.
The key to success when choosing a passive investing real estate investment trust is take the time to fully analyze the management team and learn more about their track record. You should also pay close attention to how the management team is compensated, especially if their compensation is based upon performance, because their goal should always be to look out for the best interests of their investors since that’s what’s going to produce the highest return for the REIT.
Last of all, but most important, another excellent way to get started with earning passive income through real estate investing is by investing in multifamily properties.
These types of properties typically have a minimum of four units per building, are available most cities across the United States, and there is more than one way to get started.
With real estate crowdfunding, there’s not going to be any need for you to research the rental properties that the fund is invested in because of the simple fact that each property is going to be thoroughly vetted by the crowdfunding platform.
With multifamily passive income investments crowdfunding there’s also a low barrier of entry, and you can make your first investment for as little as $1,000, without having to actually visit the property in person but the trade-off is that the holding period could last for several years so this could tie up funds that you may need access to in the future.
As we mentioned above, real estate investment trusts are another great way to build best passive income in real estate investing, especially if you invest in a multi-family REIT.
With a multifamily Real Estate Investment Trust, you have the ability to get started with investing in multifamily properties without having to actually deal with that traditional hassles, like property management, that could come from owning a multi-family property.
Direct Ownership – If you’re the type of investor who doesn’t like the idea of getting started with multifamily crowdfunding, or a multi-family REIT, then direct ownership of a multi-family property may be for you.
There’s never been a better time in the world to own a multi-family property than right now, especially because of the fact that in 2020, more people are choosing to rent instead of buy real estate than ever before.
Even though multifamily properties are located in most cities across the United States, there are things that you should consider when choosing a multi-family property including the following:
Location – The location of the multifamily property that you choose should be close to public transportation, near the city center and conveniently located close to restaurants, shops and stores.
Choose the wrong location and you could find yourself owning a multi-family property which has vacancies that could be difficult for you to fill, and very frustrating for you to own, so it’s best for you to study the location of the multifamily property very carefully including analyzing comparable properties in the area so that you know everything about the property that you plan on investing in.
Besides paying close attention to the location, you should also take the time to thoroughly analyze what’s happening with the local economy, including the jobs market.
In 2020, the jobs market across the United States has changed, and we currently have close to 40 million people unemployed so even though vacancies may have been easy for some investors to fill in the past, that’s likely to change in the months ahead as more people are out of work and companies that were previously considered to be bedrocks of society have shut down.
Inspect The Property For Deferred Maintenance – Even though you may have found a great multi-family property on paper, you should always take the time to visit that property in person, or hire an inspector, to inspect because it may have preferred maintenance that you’re going to have to take care of after you purchase the property.
When considering deferred maintenance, you should always think about how much it’s going to cost to get that work done in because as the owner of the property, you’re going to be responsible for making those repairs so if you find a great deal, take this into account while also overestimating your expenses so you don’t run out of money.
Work with Trier Capital
There’s no doubt that multifamily investing is one of the best ways to build passive income through real estate investing, but as we mentioned in this article it can definitely take a lot of work if you do it yourself.
What’s the solution to the problem? Instead of investing in multifamily properties and being faced with doing all the work on your own, why not partner with a company to help you get started with investing in multifamily real estate without having to deal with the nuances, or complications, that come from purchasing and managing passive income multi-family properties?
At Trier Capital, we are a private Equity Firm that specializes in building passive income sources for our clients through our lucrative apartment building syndications. Our simple step-by-step process allows you to accelerate your wealth creation so you can live a magnificent life on your own terms, whether that means traveling the world, spending more time with family and friends, or making an impact.
To learn more about the benefits that we can offer you, contact us today by calling (630) 229-2383 or click here to connect with us online.