Property investing is a skill anyone can learn. One of the benefits about owning cash flowing property is receiving a continual, passive income. Just as there are different strategies to match your investment style, there are various ways you can generate passive income through different types of investment properties.
Ways to Create Passive Income
By understanding the power of owning property, investors create passive income through rentals. While rent increases every year, the value of a property also most likely grows every 10 years or so. This is great because, every year there are renters in a property, an investor can grow their monthly passive income. They can also use leverage to expand their investment portfolio. While there are various ways to invest, in this article, you will learn the two ways you can create a passive income for you and your family:
- Own a surplus-producing property
- these are the types of rental estates that cash flow positively
- in this case, the monthly rent covers all expenses and still provides the owner with an income
- Access equity on a property
- accessing the property’s increased value allows you to sell off your property – to get money – by borrowing against the equity on it
- when done strategically this method works, but first you need to be certain that increased rents will be sufficient to pay towards the extra equity loan you take to avoid paying from your pocket
Rental Properties For Passive Income
There are various property structures that can be rented out in exchange for passive incomes that can increase in value over time. Some of the most common include:
Small to Large Multi-let Investment Property
A multi-let is specifically designed to house multiple tenants or families and can certainly accelerate an investor’s passive income. Though it carries with it maintenance and operating costs, it is still more stable because of the constant demand for apartment living spaces.
Mixed Used Investment Property
With this type of property, expect to find the entire building being used for commercial activities and residential occupation at the same time. In most cases, the first floor is rented out for office use or stores whereas the residential units above accommodate people. The returns are enticing if you are interested and willing to meet the demand that comes with investing this way.
Single Family Investment Property
This type of space is suitable to rent out to a single tenant or family. It can be a house or flat. Bear in mind – the key here is to buy the property below market value, renovate it before renting. This is done so that the ROI beats the buying price. This is to ensure that the property cash flows positively. This popular method of investing works well as an entrance strategy for first-time property investors who are still getting the hang of things, while getting an income.
Office Investment Park or Property
An office park or property is purposefully set up to house companies to conduct business activities. This can either be a small building for one business tenant or multiple units that are rented out to various companies. A great perk about this property type is the potential to make a lot more money when there are tenants renting. The money is so good you can use it to pay your mortgage, personal bills, and treat yourself to a holiday without compromising your lifestyle.
So as you can see, property investing is the real deal. If you want additional income, freedom or just a way out of the rat race – consider the options and value of investing in property.
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