It’s never a bad idea to have additional streams of income aside from your normal pay. Residual or passive income can really help improve your lifestyle, create more cash flow in your life, and give you more comfort. One of the best investments that can provide residual income is investing in real estate.
Real estate investment can come in multiple forms such as investing in single family homes, multifamily rental properties, large scale developments, land or even crowdfunding.
The key to creating this type of income is to make an investment that has a positive return every month. Since it takes cash up front to make an investment, it’s important to make sure that you have money saved up beyond what you are investing because it may take some time to see a return.
It is also incredibly important to do your due diligence and make sure that you run the numbers so that you know whether you’re getting a good deal or not. There are many resources out there to help you with this, such as other investors, developers, contractors, real estate agents and of course the internet.
The toughest part about making passive income is the initial work and effort needed to set it up. For example in real estate investing, a flip will need renovations to be in a state that it can be resold for a profit. Also with rental properties, they may need some repair before they can be rented for the highest amount. Whether flipping or renting you will also need to market the property to find buyers or renters.
All the work listed above can be done by other parties such as real estate agents for marketing and contractors for renovating. Although, it is important to keep in mind the more you pay out of pocket to get these things done the longer it will take to get your investment back.
There is an easier way to invest in real estate though and that’s through crowdfunding. Crowdfunding for real estate allows multiple investors to invest in a project that a developer is working on. If you invest in the project, you only need to put up a portion so it’s a great way to get your feet wet in real estate investing.
Sites like Patch of Land are open to investors with a minimum of $5,000. All of their deals have been pre-funded and had due diligence done to allow you to invest your money with confidence.