What’s the Best Way To Make Passive Income?

Everyone loves the idea to make money with minimal effort. real estate One area in which this is possible is the kitchen.

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Passive income doesn’t necessarily mean that you sit back and watch the money roll in without doing anything, though. Jon Sanborn, cofounder of Brotherly Love Real Estate in Philadelphia, “A passive income is a real estate strategy through which investors can generate earnings without being actively involved.”

This often means that you will need to have some money in order to invest before the investment pays off. Here are some examples. 10 ways experts recommend earning passive income through real estate.

Self Storage Facilities: Make an Investment

Sanborn explained that storage facilities are in high demand and can be found everywhere in the U.S. making them a great opportunity to make passive income.

“Around 39% of real estate investors vouch for this option and prefer it in comparison to rentals or vacation homes. Investing in Class A or B storage facilities by renting them out is a safe and efficient way to increase income.”

Property Rehabilitation

If you’re handy at renovating and redecorating, property rehabilitation might be a great road for you. “Fixing and flipping properties requires a more active role but could be quite lucrative,” Sanborn explained.

Rent a portion of your home

This might be an option if you’re not quite up for the level of work involved in an Airbnb situation (which requires playing the part of host, plus regular cleaning and maintenance), and you have a large dwelling with unused space. Sanborn recommends renting out “the other part [of your home] either as short-term rentals or as a studio rental.”

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Event Rentals

Sanborn explained that homeowners who have a second residence in a desirable location such as a beach can rent it out for festivals and events.

Another example of this is from Marcia SocasShe is a successful real estate investor who has been helping her son for over 20 years. Her creative idea to earn passive income was to rent a home in the Alabama city where he is studying. He can earn as much as $1250 per night renting his house after obtaining a short-term license from the city.

“This is a passive way for him to earn great income, which in turns pays the mortgage. He can also have the house to himself most of the year, without the need to share it with other college students. It’s worked very well for him and by the time he graduates he should have a few years of mortgage paid down, and the house should have appreciated nicely in value.”

Land Lease

Richard Mews, CEO of Real Estate Investors and Land & Property Managers at The Company, says that land leases can be a great way to make money, even if you don’t own a building. Sell With Richard. “The land under a structure that you rent to the building’s developer is your property. Ground leases are often less risky and generate predictable passive leasing income. Land leases provide a lesser prospect for earning in return for a small risk environment.”

Offer mortgage notes

Mews explained that another way to generate passive income from real estate is to act as a bank by selling mortgage notes to potential buyers. “When you invest in notes…the buyer gives you a monthly principle and interest payment. The buyer is responsible to maintain, insure, and pay taxes on the asset. It is your responsibility to collect a check each month and maintain records of the repayments and remaining debt.”

Rent out a single-family home

A good starting place for those who don’t have a lot of experience generating income through real estate is to purchase a single home or condo and rent it out to single renter, according to Shad Elia, CEO of New England Home BuyersMassachusetts-based realty investment firm,.

“Single-family tenants typically have a greater sense of psychological ownership over the home, which motivates them to maintain it better. However, a single unit will generate zero income if it is unoccupied.”

Real Estate Investment Trust (REIT)

A REIT is a way to generate income, without the need to rent or purchase any property. Elia explained that a REIT can be a business that finances or owns high-end buildings or commercial buildings and generates revenue.

“They combine money from many investors and invest it in capital growth. Because they pay high-yield dividend income, REITs can be a great source of passive income. You can diversify your portfolio by investing in REITs.”

Even if you don’t have a lot of money to invest, you can still participate in property investments because REITs own a variety of real estate assets, Elia said. “REITs trade like stocks because they are liquid. When the market opens, you can purchase, and when it closes, you can sell.”

Leverage Debt To Buy Income-Producing Assets

Colby Hager, the owner of Colby Hager said that another strategy is to leverage debt to purchase income-producing assets. Capstone Homebuyers Texas. “This can be done by taking out a loan to purchase more property, or by refinancing the mortgage and pulling out some of the equity. Either way, the goal is to use someone else’s money to buy more property and increase your return on investment.”

Real Estate Investor Groups: Lend money

If you’ve got some cash to spare but don’t want to purchase anything, Melanie Hartmann, owner of Creo Home Buyers Maryland recommends lending money to another investor or group in real estate.

“You have the option of short-term lending on fix-and-flips or longer-term lending such as syndications on large commercial properties or apartment complexes and anything in between. There are endless opportunities to invest passively in the real estate space regardless of how much or how little you have to lend.”

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This article first appeared on GOBankingRates.com: Ask a Real Estate Investor: What’s the Best Way To Make Passive Income?