One of the best known ways to earn passive income is real estate. Real estate is also known as real estate that can be houses, buildings, land, etc. Real estate within the wide variety of possibilities is considered a fairly safe investment, although of course it has some associated risks.
Real estate is a good option in times of high volatility since the value of real estate usually goes upwards, especially if there are no problems of depreciation due to abandonment or lack of maintenance, loss of surplus value in the area where they are located, among other possible threats.
To acquire a real estate property, it is recommended to consult with legal experts such as a notary, a professional appraiser, etc. to avoid being a victim of fraud or legal problems. Of course, it also requires the necessary leverage (money) that can be obtained from own capital or through access to a loan. Now customers have the opportunity to get paid online to buy real estate property, for this reason, they can easily pay through the internet.
How can you get money from real estate?
There are two basic methods to obtain money from real estate: sale and rent.
Sale of real estate
You can get money from real estate when you sell it, but you can logically obtain a profit only if the sale price exceeds the purchase price plus all the expenses that have been incurred for the acquisition, repair, maintenance, etc. of the real estate. Within the costs should be considered, of course, the interest paid to the creditor, if the capital to invest was obtained through a loan.
The sale of a real estate property could not really be considered as a passive income method since it is a single income generated by the sale of the property and not of periodic income obtained over a long term. However, the purchase and sale of real estate does not stop being a good business, if you have the knowledge, skills and abilities to achieve good agreements in these transactions.
Rent of real estate
The second method to obtain passive income is the rental of real estate. Renting a real estate (a house, a department, or a building) means that you are granting the rights of use of that real estate to a person or an organization, without assigning your property rights over it. Some consulted investors claim that property income can deliver returns (or returns on investment) of up to 30% annually, which are much higher than those obtained from most conventional investment methods, however, in my personal experience, I can say that it is possible to obtain returns of more than 10% per year, depending of course on the real estate market where you are.
Is passive income the money obtained from the rental of real estate?
The income obtained by the rental of real estate can qualify fairly well within the paradigm of passive income, since it is periodic income that is obtained on a regular basis (usually month to month) without requiring much time invested on your part. Of course there are some tasks to perform to maintain a well-functioning property, such as maintenance, repairs, etc. however, the time required is relatively little compared to the income obtained.
When renting an immovable property, it is necessary to be very careful with the lease contract; it is also very convenient to have a guarantee (obligated) or a deposit, to avoid problems with payments. I also recommend being very careful when selecting a tenant with good background, to save you many future difficulties.
Although the generation of passive income through the rental of real estate has its challenges and its risks, it is a good complementary method to complete your portfolio of passive income. If done carefully, it can be a very profitable and quite safe investment.
Finally, I remind you that you can learn more details about other methods for the generation of passive income on the following website: https://trueworld.eu
