How can you increase your financial freedom through real estate? You can start by creating passive income streams.
Passive income is what every real estate professional is after.
Real Estate Passive Income Streams are income streams designed to generate cash flow month to month in or related to the real estate industry, without the need for significant time commitment or ongoing management.
In this article, we’ll go over 13 different ways to create and grow real estate passive income streams.
By following these strategies, you can build a foundation for success that will not only help you achieve financial independence but also allow more time for personal pursuits so that you can have both time and money freedom and live the lifestyle that you really want to live.
13 Real Estate Passive Income Streams:
- Rental Properties
- Rent out a Room
- Commercial Leasing
- REITs
- Money Lending
- Property Management
- Crowdfunding
- Parking Spaces
- Referrals
- Informational Products
- Seller Financing
- Airbnb
- eXp Revenue Share
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1. Rental Properties
Rental Properties are one of the most common and important types of passive income streams for real estate professionals.
There are a few reasons why rental properties are so crucial for generating passive income.
First, rental properties offer a steady monthly income. This is important because it provides a consistent cash flow that you can count on month after month.
Second, rental properties are a great way to build equity. Equity is the difference between the value of a property and the amount of money that you owe on it. As your property equity grows, so does your net worth.
Third, rental properties offer tax benefits. The government offers a number of tax breaks for those who invest in rental property. These tax breaks can help to reduce your tax liability.
2. Rent Out a Room in Your Home
One of the easiest ways to create a passive income stream is by renting out a room in your home.
There are a few reasons why this is such a great way to generate passive income.
Renting out a room in your home is a great way to make extra money without you having to put in a lot of work. This can be helpful in reducing your monthly expenses or in helping you save up for a down payment on a new property.
Also, renting out a room in your home can help you build equity. As your renter pays down the mortgage on the property, their payments will also increase your equity in the property.
This strategy is commonly known as house hacking and can be done on a larger scale through owning duplexes, triplexes, or 4-plexes.
3. Commercial Leasing
Commercial leasing is one of the most important passive income streams for real estate professionals.
Commercial leasing is a way to make money from renting out your property for businesses.
One way that real estate professionals can use commercial leasing to generate income is by finding a business to rent to.
This can be done by looking for businesses in your area that are looking for a new space or by reaching out to businesses that you think would be a good fit for your property.
Once you have found a business to rent to, it is important to create a lease agreement that is fair for both parties. This agreement should include the monthly rent amount, the term of the lease, and any other important details.
It is also important to keep in mind that commercial leases are typically longer than residential leases, so be sure that you are comfortable with committing to a long-term lease agreement.
4. Real Estate Investment Trusts (REIT)
Real estate investment trusts (REITs) are one of the most important types of passive income for real estate professionals.
REITs are a way for you to invest in real estate without having to purchase a property yourself.
This is important because it allows you to invest in a wide variety of properties without having to worry about the day-to-day management of those properties.
REITs also offer a number of tax benefits that can help reduce your tax liability much like owning rental properties.
5. Mortgage/Private/Hard Money Lending
Mortgage lending is a way to make money from loaning other investors money to buy rental properties.
Real estate professionals can make passive income by lending money to investors who are looking to purchase rental properties. This can be done by working with a mortgage lender or by creating your own hard money lending company.
Another way to make passive income through real estate is by lending money to house flippers. House flippers are individuals who purchase and renovate properties for sale. By lending money to house flippers, you can help them purchase more properties while you make the interest in the amount of the time that they hold the property during their construction/renovation period.
6. Property Management
Real estate professionals can make passive income by managing other people’s properties.
They do this by charging the owner of the property a monthly fee to manage the investment property, usually 10% of the gross monthly income for each property.
A property manager is responsible for the day-to-day operations of a property. This includes collecting rent, maintaining the property, and addressing any issues that may arise.
Be aware that in some states, you do need to be licensed as either a real estate agent or broker to be able to manage other people’s properties for income.
7. Crowdfunding
Crowdfunding is a way to get money from a lot of people to help finance a project. People who give money are called “crowdfunders.”
Some people use crowdfunding to help finance their real estate projects. This can be done by creating a campaign on a crowdfunding website or by reaching out to family and friends.
Crowdfunding can be a great way for investors to get their projects off the ground.
You can invest in real estate projects through crowdfunding to make passive income without having to manage the property. This is a great way for investors who have more money than they do time to create a passive income stream.
8. Receiving rent for parking spaces
Some people invest in parking spaces. They can be rented out for a monthly fee. The owner does not have to do anything else. They just get the rent money every month.
This is a lesser-known passive income source, but it is something that can be done fairly easily.
There are a few ways to buy parking spaces and rent them out for money each month. One way is to buy a parking space in a city where there is a lot of traffic. This will ensure that there is high demand for the space.
Another way to buy a parking space is to find a space that is close to public transportation or major attractions. This will make it easier for people to get to, which will increase the demand for the space.
Finally, if you want to buy a parking space, be sure to do your research first. Make sure that you are getting a good deal on the space and that it is in a good location just like you would for rental or commercial property investment.
9. Get paid to refer people to buy or sell a home
If you have a real estate license, you can get paid when you refer someone to buy or sell a home with another realtor. This is called a referral.
When someone buys or sells a home, they usually go to a real estate agent. That agent will then give the person who referred them to the buyer or seller money as a thank-you for sending them business.
Real estate referrals are usually 25% of the total commission size.
A referral fee can be a great way to make passive income from real estate. You do not have to actively work for the money. Instead, all you have to do is refer someone else and then wait until they buy or sell a house.
Want To Build Financial Freedom as a Real Estate Agent? Let Us Show You How! Click a below to Learn More About the Opportunity to Partner with Our Incredible Group of Real Estate Agents Around the World that is Leveraging Multiple Streams of Income to Build a Lifestyle They Never Need a Vacation From!
10. Create and sell an informational product
Some successful real estate professionals use their knowledge and expertise to make money by selling online courses.
They can do this by creating a course that teaches people about real estate, marketing, investing, wealth-building, or sales.
This can help other people who want to become real estate entrepreneurs. It can also help current real estate professionals learn new skills and strategies for making more money.
Being an online course creator is a way that many real estate professionals make passive income. All they have to do is create the course once, and then it will continue to make them money in perpetuity without needing any additional work on their part.
Creating and selling a book and collecting passive royalty income is also a great alternative to making online courses.
11. Seller Financing
Seller financing is when you “become the bank”
Real estate professionals can use seller financing to create passive income. Seller financing is when you sell a home but the buyer pays you every month, not the bank. This can be a great way to get your property off the market quickly.
You can also use seller financing to get a higher price for your home. The buyer will be more likely to pay more money if they know that they do not have to go through a bank.
Seller financing is a great way to make money without having to do any additional work. You just have to find a buyer who will agree to your terms.
Usually seller financing is best for buyers who can not get bank financing or a mortgage but is able to make monthly payments to pay off the home.
When you seller finance a home you sell, you are essentially earning passive income every month equivalent or similar to the amount of a rental income but since you don’t own the home, you are not responsible for any damages and do not have to manage the property.
12. Airbnb Rental Properties
Airbnb rental properties are another great way to generate passive income.
There are a few reasons why Airbnb rental properties are such a great way to make money.
Short-term rentals are a great way to make money. Since turnovers are higher, you can charge more per stay.
Owning short-term rentals is much like being in the hospitality or hotel industry. You can run your business from home and you do not have to worry about many of the issues that come with long-term property management.
A downside of owning short-term rentals is that you do need to put more work in each month to manage your properties because turn-over rates are higher and you also are putting yourself at more risk because it is more of a commodity and luxury service than long term residential real estate.
Short-term rentals are also a great way to diversify your real estate portfolio.
13. exp Revenue Share
Lastly, if you want to make passive income without having to invest a lot of money or take on financial and legal risk, you might want to consider the revenue share model at eXp Realty.
As a real estate agent, you can choose to join the brokerage eXp Realty and participate in the revenue share model.
The revenue share model is where the company will pay you to refer other quality producing real estate agents to join the brokerage through sharing back the revenue generated to the company through the agents’ production each month.
It is a great way for real estate professionals who are well connected to generate a passive income stream. It is also a great income stream because it has a duplication component that almost no other passive income stream has that allows your revenue share income to grow exponentially over time.
To learn more about the revenue share model at eXp Realty, Click the Button Below:
Passive Income Streams in Real Estate: Change Your Lifestyle Today!
Real estate has a variety of passive income streams available to real estate professionals.
However, all of these methods have one commonality- they require some effort on the part of the real estate professional to get started.
Once you have taken the initial steps to create a passive income stream that is self-sustaining, it will continue to make money for you without requiring any additional work.
This will allow you to free up more of your time that you can then use to spend with your friends and family, take vacations/travel, or you can re-invest that time to create more streams of passive income and increase your income to build an even better lifestyle.
So, what are you waiting for? Get started today!
If you’re interested in learning more about how to build financial freedom through real estate, I would encourage you to learn more about joining our real estate group.
We are a group of real estate professionals that is built on the principle of wealth-building, and we are committed to helping our agents build passive income streams to create the lifestyle that they have always wanted. To learn more about how to join our group and start building a lifestyle that you never need a vacation from, Click the Button Below:
