Business & Finance

Fractional Ownership and Other Ways To Earn Passive Income In Real Estate


Sure, you have a solid income from your 9 to 5 work. But, you know deep down that you have always desired more. Is it not better to have more money, independence, and flexibility? So, you finally determine that it is time to act. Passive income investments help you generate that money while doing the bare minimum. Guess what better way to grab that opportunity? Real estate delivers passive income through rent while you continue to work full-time. So, you can now get everything you have ever wanted.

Passive income what?

“If you do not find a way to make money while you sleep, you will work until you die,”, says Warren Buffet. Warren Buffett’s portfolio of investments continues to work hard even as he sleeps, earning him extra income. Do your investments pause for you to take action to generate money by selling shares when you go to bed at night? Does it strive tirelessly to produce more money for you? Today is an excellent day to alter your portfolio so that you may generate money while you sleep by investing in real estate.

Money acquired without actively working for it is referred to as passive income. Some types of passive income need upfront effort or some work to earn money, but not like a 9 to 5 employment.

Passive income sources should ideally provide dividends or interest and, in the case of real estate, should grow over time without your intervention. Passive real estate investments diversify your portfolio and produce more money to help you reach your financial goals. You are not personally managing the investment. So, this form of income is passive.

What exactly is passive income real estate?

If you have ever invested in real estate, you know it is not always a passive investment. Yes, getting monthly rent checks is beneficial, but more often than not, you will need to remind the tenant that it is the first of the month again. Furthermore, maintenance issues always seem to develop when you are out of town and need to find and supervise a contractor. There are, however, ways to make money in real estate without putting forth a lot of work. Real estate may get used to generating passive revenue in ways.

Passive income real estate is a way of generating cash from real estate without actively engaging. The level of activity and involvement varies per investment. So, the phrase passive income gets used loosely. Rental properties and investment portfolio earnings are examples of this form of real estate income.

So, how can you earn passive income from real estate?

  • Rental Properties: When asked about passive income, the first investment choice that comes to mind is residential property. You can also earn passive income through rental properties. Residential homes are one of the best ways to generate passive income. You may generate consistent regular profits by purchasing a residential home and renting it out. Residential real estate is in the utility sector, so any downward tendencies are only temporary. As a result, they protect your investment and passive income generating. Even though they are the apex of passive income streams, they require care and attention. Repair issues must get resolved as soon as possible, and renters must get vetted to provide a hassle-free income. You must look for new employees due to vacancies. In today’s hectic environment, you might wish to prevent these tiny hiccups. If you want to avoid these, move on to the following clever passive income source.
  • Commercial Properties: Commercial properties are high on investors’ wish lists due to the massive profits they provide and the variety of investment choices they provide. You may invest in commercial buildings, warehouses, office spaces, and data centers. Commercial properties have a high Return on Investment (ROI) of 10-12%, assuring substantial profits. In comparison to other real estate assets, commercial real estate assets have rental contract arrangements. It eliminates the danger of vacancy and offers a consistent revenue flow, which is the primary goal of passive income. Commercial real estate properties are often valued at hundreds of crores, making them unattainable to middle-class investors. However, as technology progresses, fresh investing concepts such as fractional ownership and crowdfunding emerge to democratize the financial system. Assetmonk, the innovative WealthTech platform, simplifies the commercial real estate market for you. The firm provides its investors with high-end A-Grade investment opportunities via fractional ownership and crowdfunding.
  • Fractional Ownership: CRE fractional ownership is an investing structure in which numerous individual investors pool their funds to acquire a real estate property. The investors become owners of a piece of the property depending on their investments and the weight of investing. Risks and gains get shared by all investors. It is best suited to a single investor who may not be able to fund the entire property. Investors can buy a share of high-end commercial property and earn a stable rental income while growing long-term wealth. Fractional ownership allows you to invest as little as Rs. 25 lakh. Thus, the investment is incredibly cost-effective and gives twofold returns. The first is the direct returns from the investment, and the second is the advantages of asset appreciation. You own a portion of the real estate property, so the value of your share will climb as well. It is known for institutional investments. But, it is becoming a viable investment alternative for the savvy middle class and individual investors.
  • Real estate crowdfunding: One of the impediments to engaging in commercial real estate is a shortage of capital. The typical person lacks the funds and skills to purchase a downtown office skyscraper or a 100-unit apartment building. Most people would never think about it. Crowdfunding allows individuals to invest in smaller-scale initiatives like these. Instead of owning a commercial property personally, you can buy equity shares in the deal for a portion of the total money necessary for the project. Consider it a form of partial ownership. Real estate crowdfunding generates passive income and gains access to the real estate market without requiring a massive initial commitment. It allows investors to earn a lot of money with little engagement. As a result, passive income is more comfortable and accessible for investors.
  • Co-living Models: Co-living spaces are residential setups in which tenants share amenities such as kitchens and living rooms to accommodate more people than would be possible in a traditional housing scenario. In urban regions, where growing rent and living costs make it financially feasible to share a house with strangers, affordable housing is scarce. Millennials and students are propelling the growth because it provides affordability, flexible contracts, community involvement, and hassle-free living. Co-living, per the Anarock Property Consultants, delivers a 7-11 percent higher rent yield than the domestic residential average of 3 percent. According to experts, property owners might gain from converting a standard flat into a co-living space because such spaces are in great demand. Although there will always be some churn in tenants, co-living spaces provide the opportunity to earn constant rental income. Assetmonk provides co-living services. The Landing Hyderabad International Airport is its ambitious Co-Living Venture.
  • REITs: If you want a hands-off, extremely passive investing option, REITs are the way to go. If you have always wanted to own real estate but do not have the capital, a real estate investment trust is the next best thing. A real estate investment trust (REIT) is a company that owns a small number of properties. They are commercial assets that generate positive passive income without personally investing in them. When you buy a REIT, you indirectly invest in commercial real estate. As the value of your properties grows, so will the worth of your shares, which you may be able to sell for a higher price in the future.


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