If you’re a new investor, you may be wondering what is passive income?
This is an understandable question to ask because many people talk about passive income, but they don’t explain how you can actually earn passive income.
In this article, I’ll answer the question of what is passive income by providing you with tips that you can use to start building passive income streams in 2021.
What Is Passive Income?
Before I provide you with some tips for passive income streams that you may want to consider, I want to explain what passive income really is.
If you are currently working in a job for an employer, the money that you earn every month is classified as ‘active income’.
Passive income is money that you earn that comes from a job, side business, or another investment that you don’t have to actively participate to maintain that income stream.
Ideally, with passive income, you are not working more than four hours per month to maintain that income stream because it’s no longer classified as passive income and it becomes active income.
In 2021, there are a wide variety of passive income streams out there including stock dividends, rental property income, book royalties, and more.
Sadly, even though you may know some investors who have not been able to answer the question of passive income, the reality is that it’s never been easier to earn passive income than right now.
Thanks to the internet, you can easily earn passive income from home by investing in real estate via crowdfunding, dividend stocks, or mortgage notes.
Let’s say that you are internet Savvy, you could also use the internet to create an e-commerce website, sell affiliate products, or you could create your product to sell that on the internet as well.
What Are The Best Ways To Create Passive Income Streams?
If you’re wondering what’s the best way to earn passive income in 2021? The answer to this question is real estate investing.
Since I’m assuming that you are a new investor, the first method that you may want to consider for earning passive income is to rent out a room in your home. This method of passive income generation is also known as ‘house hacking’.
Many investors get started with house hacking in the very beginning because it enables them to gain experience as landlords while earning passive income from Real Estate that they already own.
Once you decide to move beyond house hacking, you may want to consider investing in other forms of real estate including the following:
Mobile Home Parks – I’ve mentioned mobile home parks on this blog quite a bit over the last year because mobile homes are now everywhere across the United States.
The key to success with investing in the mobile home park is to make sure that you keep that park properly maintained. This means that you are going to hire a property management company right away because the last thing that you want to do is to spend time and money trying to maintain that park yourself.
Land Lots – Since land is not being made anymore, it’s an asset that’s in short supply.
Every investor should add land to their portfolio simply because you never know when that land could be in demand in the coming years either for its natural resources, or it could be in demand from an investor who wants to buy the land to build homes there.
Self-Storage – Regardless of where you live in the United States, self-storage facilities are everywhere because the average person has a lot of stuff that they don’t want to get rid of. That means that if they don’t have storage in their homes, they have to store it somewhere.
The great thing about owning a self-storage facility is that they are cheap to build and if you invest in keeping your self-storage facility secure, it’s possible to have tenants renting those storage spaces from you for years to come.
Multifamily Properties – Last of all, but most important, if you still have the question of what is passive income on your mind, and you’re interested in investing in the best passive income stream possible, you may want to consider investing in a multi-family property
Since this blog is dedicated to multifamily investing, it’s obvious that multifamily properties are my preferred method for creating passive income streams.
I prefer multifamily properties vs. single-family properties simply because with a multi-family property it’s possible to earn more sources of passive income, compared to a single-family property which only enables investors to earn just one source of passive income every month.
Multi-family properties are also easier to scale than single-family properties and once an investor hires a property management company to manage the property for them, they enable an investor to earn passive income from that property every month without having to do any work themselves.
Let’s say that you plan on investing in multifamily properties and your city or state, the key to success with investing in multi-family properties is to first focus on due diligence. This means that you take the time to thoroughly investigate the property before you spend your hard-earned money and time investing in it.
Contact Trier Capital
At Trier Capital, we do all the hard work to find and acquire ideal properties, and then oversee asset management after purchase, while our investors sit back, relax, and receive tax-advantaged passive cash flow.
If you’re an accredited investor and are ready to get started with investing in multifamily properties, I invite you to contact me today by calling (630) 229-2383 or click here.