In today’s post, we will explore 3 ways you can generate passive income in real estate business. These real estate business ideas will make you money and afford you time to work on other money-making stuff – that’s the very idea of passive income, isn’t it?
In this current economic climate, it is more important now than ever to have your money working for you instead of the other way round. As you must know by now, passive income is one key to financial freedom and that is why this post could not have come at a better time for you.
These real estate business ideas are ideas you can implement once and reap the benefits consistently and regularly for a long time.
Many people shy away from real estate business because of how capital-intensive it can be, the long time it could take to get going and the stiff competition from the overlords of real estate business.
The truth is, real estate is one of the most lucrative industries to capitalize. True, it requires capital but it’s possible to start your own estate business with little or no capital. More than that, it’s very possible and even lucrative to generate recursive passive income in real estate business.
Here are 3 business ideas that can generate passive income for you in the real estate business
How to generate passive income in real estate business
1. Become an Airbnb Host
If you have not heard about Airbnb for the first time, you are hearing about it now. Airbnb is an online hospitality marketplace where visitors can find short-term lodging accommodation for rent.
It means if you have a spare room, flat or house, you can list it on the Airbnb marketplace so people can rent these places for the short-term. They make payment to Airbnb while Airbnb pays you.
Airbnb hosts make money the way hotels make money. Only difference is, as an Airbnb host you only list your room/flat/house and Airbnb does everything else.
To learn more, check out this article.
2. Earn Commission as a Real Estate Agent
Yes, you can generate passive income as a real estate agent if you don’t have the money to spend on properties. As a real estate agent, you can generate passive income from two sources.
One, you can help landlords find tenants and get up to 20% commission for every deal you help close. As an agent, you are a middle man. You help busy tenants find a good home that they can rent and you get a commission for doing a good job.
Two, you can help investors get convenient deals. There are many real estate investors looking for potential clients and good deals. Just make sure you know where and how to search for clients willing to buy properties and you make awesome commission linking both parties.
Each of these ways would require that you know your way around town, have good communication and people skills, and have a good eye for business and lots of common sense.
You can use social media and the powers of the internet to make this work passively for you. So you list online the property you have and you attend to potential buyers when they call you. There are other marketplaces like Olx and Jiji.
3. Rent or lease your property
This is one of the most common ways people make passive income in real estate everywhere in the world. It’s quite simple but never easy because it takes lots of capital to accomplish. It is, however, the best way to generate passive income in real estate business.
If you have an existing property, say an empty land located in a good site, you can give it out on lease to companies and investors. If you don’t have, you can buy and put them to good use.
You can also develop the land and let people occupy it on rent. If you are buying an empty land, you can leave it as is for someone to take on lease and develop.
If you want to develop the property yourself, then you decide what you want to do with it after which you rent or lease it out.
What to do when you don’t have the money to invest
The most difficult challenge you will probably have in real estate business is the capital to buy or develop an existing property. So what to do?
Well, for one you can find investors and partner with them. You can also enter a joint venture with other people who are interested in the same line of business as you. This concept is explained very well in this guest post.
You will need a good property with a legal title. You will also need a property in a choice location where it’s easy for people to see.
Make sure you are buying the property from a genuine source. It’s very easy to get scammed in the real estate business so insure you do your due diligence in research and background checks before you begin with this.
Some of what you can build for rent are:
- Shopping mall
- Event center
- Apartment houses
- Office spaces
- Co-working hubs, etc
You can also buy an existing building, redevelop it and make money off it.
This income idea is for the experienced though. If you lack the knowledge or the experience, you could find yourself at the losing end.
If you have extensive knowledge about a property that needs repair for sale, you can definitely takeover the property and develop it – make it look better and attractive.
Experts in the game will always tell you to wait till the market price rises before you sell at a higher price. And when waiting, you can put the property out for rent for a year before reselling it to potential clients.
Then you sit back and make money
The fastest way to get these kinds of properties sold faster is through real estate agents. They will help you list the property for sale, rent or lease. They will also help you find potential buyers instead of you doing it yourself.
If you want to take passive to a whole new and fun level, you can let a property lawyer take over the property, collect payments, manage the property and do everything else property lawyers do. You have no business with clients; you will just sit back, relax and enjoy your recursive passive income.
Getting started in real estate business is not easy but generating passive income is sure.
Real estate investment can make you decent amount of passive income. It just only requires extensive knowledge and experience which you can learn by either taking a real estate investment class or learning from an expert.
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