Спор о деньгах №178

Удивительно, но факт: согласно Всероссийскому центру изучения общественного мнения (ВЦИОМ), россияне считают наиболее привлекательным способом вложения денег – недвижимость.

А уж если речь идет о пассивном доходе, то тут ни о каких других способах даже не заикайтесь! Недвижимость – и точка! Ну как же?! Она ведь и в цене ВСЕГДА растет, и доход от аренды приносит!

По роду своей деятельности, я часто встречаюсь с клиентами, которые самостоятельно и на довольно высоком уровне инвестируют в недвижимость и занимаются этим много лет. Все они утверждают, что доходность по объектам недвижимости составляет максимум 6-7%.

Именно поэтому, я решила провести что-то типа модного «журналистского расследования» и найти реальные примеры с расчетами. Поскольку я лично в «живую» недвижимость деньги не вкладываю, изначально считая занятие сие делом неблагодарным и невыгодным, я пошла «побираться» по клиентам и коллегам. «Подайте, кто сколько может, реальных примеров с расчетами по объектам недвижимости».

В результате, благодаря добрым людям, у меня на руках сегодня есть 2 абсолютно реальных примера о доходности объектов недвижимости.

Посчитаем вместе?

Квартира №1.

Была куплена в сентябре 2007г.  за 190 000$. Услуги риэлторов и прочие расходы при покупке составили 10 000$. Итого = 200 000$ или 5 118 000 по курсу 25,5896.

За эти годы расходы составили:

• Кухня и диван – 150 000р.
• Техника на кухню и стиральная машина – 50 000р.
• Мебель от ИКЕА – 70 000р.
• Обновление чехла – 7 000р.
• Мелкий ремонт сантехники – 5 000р.
• Услуги риэлторов на поиск новых арендаторов – 150 000р.
• Простоев не было

Итого было вложено в квартиру за 8,5 лет = 5 550 000р. (надо же, какая красивая сумма получилась)))

За это время она принесла доход:

Поскольку раньше у владельца квартиры были некоторые проблемы с ведением бюджета, то четкие данные есть только за последние 3 года. До этого – стоимость аренды составляла 600$ и минус около 1800р. за коммунальные расходы. Давайте в этом случае посчитаем, что 1 октября 2007г. арендодатель начинает получать 600$ по текущему курсу минус 1800р. Курс доллара, для удобства расчетов, закрепляется на 1 октября каждого года.

В 2014г. стоимость аренды составляла 40 000р. Стоимость коммунальных расходов – 3000р.

В 2015г. стоимость аренды составляла 38 000р. Стоимость коммунальных расходов – 3000р.

В 2016г. стоимость аренды составляла 38 000р. Стоимость коммунальных расходов – 3600р.

В результате получаем:

Итак. Средняя доходность данной квартиры за все эти годы составила 4,56%. После уплаты налогов – 3,97%.

За это время стоимость квартиры выросла до 8 500 000р.

Таким образом, если ее сейчас продать, то можно получить прибыль за 8,5 лет в размере 5,09% годовых.

Итого. Вложения в данную конкретную недвижимость за 8,5 лет принесли бы общий доход (аренда + продажа) в 9,65% без учета налогов или 9,06% с учетом налогов в рублях.

Квартира №2.

Была куплена тоже в сентябре 2007г.  за 90 000$. Услуги риэлторов и прочие расходы при покупке составили 3 600$. Итого = 93 600$ или 2 395 000 по курсу 25,5896.

За эти годы расходы составили:

• Кухня, мелкий ремонт плиты, замена холодильника и матраса– 17 500р.
• Замена сантехники – 30 000р.
• Замена окон – 50 000р.
• Переклейка обоев – 16 000р.
• Мелкий ремонт сантехники – 5 000р.
• Услуги риэлторов на поиск новых арендаторов – 150 000р.
• 2 месяца простоев за 8,5 лет

Итого было вложено в квартиру за 8,5 лет = 2 663 500р.

За это время она принесла доход:

Поскольку раньше у владельца квартиры были некоторые проблемы с ведением бюджета, то четкие данные есть только за последние 3 года. До этого – стоимость аренды составляла 500$ и минус около 1500р. за коммунальные расходы. Давайте в этом случае посчитаем, что 1 октября 2007г. арендодатель начинает получать 500$ по текущему курсу минус 1500р. Курс доллара, для удобства расчетов, закрепляется на 1 октября каждого года.

В 2014г. стоимость аренды составляла 28 000р. Стоимость коммунальных расходов – 2250р.

В 2015г. стоимость аренды составляла 25 000р. Стоимость коммунальных расходов – 2650р.

В 2016г. стоимость аренды составляла 25 000р. Стоимость коммунальных расходов – 3600р.

В результате получаем:

Итак. Средняя доходность данной квартиры за все эти годы составила 6,95%. После уплаты налогов – 6,05%.

За это время стоимость квартиры выросла до 5 000 000р.

Таким образом, если ее сейчас продать, то можно получить прибыль за 8,5 лет в размере 7,61% годовых.

Итого. Вложения в данную конкретную недвижимость за 8,5 лет принесли бы общий доход (аренда + продажа) в 14,56% без учета налогов или 13,66% с учетом налогов в рублях.

На первый взгляд, доходность очень неплохая. Особенно, если сравнить эту самую доходность с другими активами на российском рынке. Так, например, я для сравнения взяла:

1. официальный уровень инфляции в России;
2. официальные ежемесячные данные ЦБ по ставкам вкладов сроком на 1 год и вычислила среднюю годовую доходность;
3. рост индекса ММВБ за этот период времени.

В результате, получилась вот такая табличка:

Как видим, если доходность по первой квартире идет примерно вровень с инфляцией, то вторая квартира показывает доход существенно выше инфляции.

Однако, что будет, если мы возьмем доходность умеренного портфеля для получения пассивного дохода из зарубежных ETF?

Вот та табличка по доходности портфеля, которую я демонстрировала на вебинаре про получение пассивного дохода.

Я посчитала, что было бы, если бы мы в октябре 2007г. вложили те самые 200 000$ (5 118 000р.) не в первую квартиру, а в такой портфель. Соответственно, в начале января каждого года мы бы снимали весь начисленный дивидендный доход и переводили бы его в рубли по действующему в январе курсу. В это же время, сам основной капитал продолжал бы расти в тех процентах, которые здесь указаны. Затем 1 мая мы бы забрали весь капитал со счета и перевели в рубли.

Как думаете, какая доходность в результате получится?

Путем нехитрых подсчетов, сначала выясняем, что средний пассивный доход данного портфеля в рублях составил 12,31%

И, наконец, продав все активы 1 мая и конвертировав полученную сумму в рубли, мы бы получили 16 057 839,43р. вместо первоначальных 5 118 000р. или 14,24% годовых в рублях.

Итого. Совокупная доходность данного портфеля в рублях за указанный период в 8,5 лет составляет 26,55%, что почти в 2 раза выше даже самой результативной доходности по квартире в Москве!

При этом необходимо помнить, что:

1. Квартира – очень низко ликвидный актив. Продать ее будет не так-то просто. Я, например, на следующий год запланировала себе расширение жилищных условий, поэтому начала потихоньку приглядывать различные предложения в своем районе. Непреложный факт – квартиры сейчас продаются о-о-очень медленно! Над одной квартирой я зимой подхихикивала – за окном снег, а там вид из окна – весь в цвету. Значит, продается с лета. И что думаете? До сих пор продается – фотки опять актуальны стали))

Что касается ETF, то их можно продать запросто в течение дня. На вывод денег уйдет максимум две недели, в зависимости от посредника. Поэтому ни о каких заморозках денег на долгие месяцы (а то и годы) речи не идет.

2. Квартира требует постоянного присмотра. Риэлторы, арендаторы, соседи, окна, ремонт, простои, коммунальные расходы и прочее… Такое ощущение, что купил не источник дохода, а источник головной боли. Если посчитать, сколько в итоге времени тратится на рентную недвижимость, то может оказаться, что за это время можно было бы заработать гораздо больше денег, потратив усилия на основную деятельность.

Что касается портфеля из ETF, то его нужно проверять раз в год, когда приходит время сделать ребалансировку. Если же мы хотим получать пассивный доход чаще, то, как я уже писала выше, на все действия по выводу средств технически уйдет максимум два часа и максимум 2 недели на получение.

3. И, наконец, не забываем про «эффект рождественской индюшки». Квартира – 1 яйцо в 1 корзине. Может что угодно произойти как с одним яйцом (квартира сгорит, дом рухнет и т.д.), так и с корзиной (в любой момент может измениться как ситуация в стране в целом, так и на рынке недвижимости в частности). При том, что в квартиру деньги вложены совсем не маленькие, будет очень обидно в один миг лишиться их по какой-то причине.

Что касается портфеля из ETF, то мы по сути вкладываем деньги в разные яйца и (можем) в разные корзины. В портфель может входить золото, фонды недвижимости, облигации и акции разных стран по всему миру. Таким образом, даже если что-то произойдет с одним активом, все деньги ни в коем случае не будут утеряны.

Общий вывод. Никогда не стоит вкладывать все имеющиеся деньги в один актив, каким бы привлекательным он не выглядел. На длительных промежутках времени портфель из зарубежных ETF будет не только выгоднее в 2 раза, но и более устойчив ко всем имеющимся инвестиционным рискам, чем самый привлекательный объект недвижимости в одной стране!

Кстати, если вы пропустили последний вебинар по пассивному доходу, в котором не только демонстрировался упоминаемый мною портфель, но и подробно рассказывалось обо всех способах получения пассивного дохода, пройдите по этой ссылке.

И, напоминаю, что с 1 июня произойдет повышение стоимости услуг, поэтому если вас интересует получение пассивного дохода, успейте воспользоваться старыми ценами.

Недвижимость как источник пассивного дохода

Пассивный доход предполагает получение прибыли без активных действий его получателя и связан с однократным вложением капитала (в том числе и интеллектуального). Несмотря на то, что  величина такого дохода  не столь высока, как от активного инвестирования и ведения бизнеса, его получение является очень привлекательным для многих людей. Это связано с тем, что пассивная прибыль имеет большую надежность, её получение не требует специальных знаний и затрат времени, не отвлекая тем самым от основных видов деятельности. Основным направлением вложения денег традиционно являются банковские вклады, однако очень много преимуществ имеет и пассивный доход на недвижимости.

Что такое недвижимость?

К недвижимости относят все, что нельзя перемещать без причинения ущерба ее назначению. Основными недвижимыми объектами являются:

Кроме того, по законам РФ к этой категории  относят воздушные и водные суда, а также космические объекты, которые подлежат госрегистрации. Получить доход от недвижимых объектов можно двумя способами – либо сдавать их в аренду, либо продать по цене более высокой, чем цена приобретения. Долговременная прибыль связана с получением арендной платы, одномоментный – с продажей.

Недвижимые объекты – основные риски

Основной особенностью получения прибыли от недвижимости является то обстоятельство, что величина капитала для первоначального вложения должна быть  достаточно большой. Однако с учетом того, что дома и квартиры часто передаются по наследству, а продать или сдать в аренду можно и совсем небольшие строения, например, гаражи или дачные дома, такой способ получения средств доступен большинству дееспособных граждан. При этом следует учитывать, что  на величину прибыли повлияют такие факторы, как:

• возможность уменьшения стоимости объекта вследствие естественного износа, намеренной порчи, аварии или стихийного бедствия;
• необходимость личного участия владельца недвижимости в управлении ею, что связано с дополнительными затратами времени и средств;
• низкая ликвидность объектов;
• временные колебания рынка недвижимости, связанные с кризисами различного рода (экономическими, политическими, социальными).

При этом специалисты считают, что  риски снижения и неполучения доходов от недвижимых объектов намного меньше, чем при других способах вложения средств. Основной предпосылкой для такого заключения является то, что в долговременном периоде стоимость практически всех объектов недвижимости, будь то квартиры, земельные участки или дачные дома, возрастает, и этот рост никогда не бывает меньше уровня инфляции.  Даже в случае сильного кризиса недвижимость остается одним из самых надежных видов вложений средств, поскольку падение этого рынка всегда происходит намного медленнее, чем рынка ценных бумаг.

Кроме того, в кризисных ситуациях наблюдается закономерность, при которой  снижение  рыночной стоимости зданий и сооружений неминуемо приводит к повышению арендной платы (и наоборот), что позволяет диверсифицировать  экономические и финансовые риски.

Как получить доход при небольших стартовых затратах?

Даже если размер начальных средств недостаточен, реальным является получение прибыли от объектов небольшой стоимости. В последнее время получил широкое распространение пассивный доход на дачных домах. Общая схема получения этого дохода следующая:

• приобретают дачные дома с земельным участком небольшой стоимости;
• в течение сезона или двух получают доход от их аренды;
• дачные дома продаются, а деньги от их продажи совместно с доходом от аренды используют для приобретения новых домов и участков  более высокой стоимости.

Следует заметить, что успешность такого бизнеса не всегда связана с вложением ресурсов в повышение стоимости объектов недвижимости, поскольку дешевые дачные дома пользуются устойчиво высоким  спросом. К слову, узнайте где можно купить недорогую недвижимость в наши дни.

Другим способом снижения величины начальных вложений является приобретение недвижимости на условиях ипотечного кредитования. При этом залогом выступает сам объект недвижимости, а его владелец имеет возможность получения прибыли  за счет арендной платы. Хорошие возможности предоставляет приобретение доли в строящемся объекте, предполагающее значительное повышение стоимости жилья по завершению строительства.  И наконец, наиболее надежным способом получения дохода для инвестора со скромными возможностями является паевое участие в инвестиционных строительных фондах.

Возможности и перспективы повышения доходов на недвижимость

Хотя недвижимость считается пассивным вложением капитала, именно она предоставляет широкие возможности для управления и оптимизации прибыли. Это связано с теми обстоятельствами, что ее владелец имеет право производить действия, направленные на повышение стоимости, а именно:

• ремонт объекта;
• его реконструкцию;
• изменение статуса с целью коммерческого использования.

После выполнения перечисленных выше действий и повышения стоимости недвижимости, дом можно выгодно продать.

При полном контроле, а также при участии в этих действиях, владелец  может существенно улучшить привлекательность и повысить ликвидность своей собственности, будь это кондоминиум или дачные дома,  с минимальными затратами.  Таким образом, пассивный доход на недвижимости – это лучший способ отдачи от капитала для активных и благоразумных людей.

90000 How to Earn Passive Income From Real Estate 90001
90002 If you’re like me, you’d 90003 always 90004 like to bring in a little extra money on the side, right? Making money outside your day job can give your net worth a boost-not to mention give you some extra peace of mind. Maybe you’ve also heard about 90003 passive income 90004 and that renting out a property is a popular way to do it. 90007

90002 But before you jump in feet first, there are a few things you need to know when it comes to rental real estate as a source of passive income.90007

90002 Let’s break it all down. 90007

90012 How to Earn Passive Income From Rental Properties 90013

90002 First, let’s get the record straight on passive income. 90015 Passive income 90016 90015 is money you earn from a source that does not take a lot of effort from you to earn. 90016 It could be investments in stocks or bonds or income from real estate, just to name a few. 90007

90002 In general, passive income is great. It can boost your retirement savings, help you retire early, or simply help you reach your wealth-building goals faster.90007

90002 Be confident about your retirement. Find an investing pro in your area today. 90007

90002 Now, there are lots to 90015 90016 90015 ways to invest in real estate 90016, but let’s take a closer look in particular at owning 90003 rental 90004 properties and why it’s such a popular way to earn a passive income. Rental properties can be a great source of 90015 90016 passive income 90003 once you get a rental up and running 90004. 90007

90002 I mention that because 90015 it’ll take some effort at the start 90016 (especially if you need to make some updates at the get-go to make it rental-ready) so it’s not 90003 completely 90004 passive.But it 90003 can 90004 provide a monthly income flow without you having to participate in any kind of daily work. 90007

90044
90002 «Rental properties can be a great source of passive income 90003 once you get a rental up and running 90004.» 90007

90002 -Chris Hogan 90007

90051

90052 How Much to Spend 90053

90002 Now, hear me out on this: If you’re looking to buy a property to rent and you’re brand-new to the rental game, think 90015 modest 90016, 90015 stable 90016 and 90015 middle of the 90016 90015 road 90016.Do not get fancy with your very first rental. 90015 Plan to pay cash 90016 for the place you want to rent out. Going hundreds of thousands of dollars into debt in order to «invest» in real estate is 90003 never 90004 a good idea! If you can, 90015 buy something that’s priced at about 70% 90016 of what it’s worth in the current market. You’re trying to 90003 make 90004 money on the investment if at all possible. 90007

90052 Where to Buy 90053

90002 Okay, in general, homes in 90015 areas with good schools 90016 and a good reputation tend to appreciate better than lower-priced properties (like apartments or condos).Look for properties in a 90015 solid neighborhood 90016 where real estate prices have been increasing over the years. 90007

90002 It’ll also attract the kinds of renters you need-responsible tenants who are less likely to damage the place or be unpredictable when it comes to paying you rent. 90007

90002 Rentals that are close to 90015 public transportation or major highways 90016 into town are usually popular with renters. Keep your eye out for any 90015 big companies 90016 moving to parts of a city to open offices or other factories.90007

90002 90015 Local is usually best 90016 for your first rental property so you can keep a close eye on your investment. You do not want your first rental to be out-of-state in a place where you can not regularly check on the condition of the property. 90007

90044
90002 «Local is usually best for your first rental property so you can keep a close eye on your investment.» 90007

90002 -Chris Hogan 90007

90051

90002 If that’s the case, you would need someone else to manage it (more on that in a minute).But if you choose a city with a good rental market and job growth along with reasonable state taxes, it can pay off in certain situations. 90007

90052 What to Buy 90053

90002 I tell people that first, you need to decide what you want to get out of the rental. Do you want an apartment with regular renters and money coming in for a longer period of time? Or do you want a house that you plan to sell for a profit within a few years? 90007

90002 90015 Buying foreclosures 90016 can be a good way to get a good deal on a property if you’re thinking about selling pretty soon after buying and renovating.However, you generally want to 90015 avoid money pits and fixer-uppers 90016 when you’re planning to rent a place. You want something that’s attractive and almost move-in-ready-not a huge project to take on during the front end of the deal.If you do not plan to manage the property yourself, a 90015 property agent 90016 will handle almost everything for you-from collecting the rent to dealing with repairs and complaints and even evictions. You’ll pay a commission to the agent, but it takes the stress off you if you’re too busy to deal with these issues.90007

90002 Always 90015 talk to a real estate agent 90016 about how much rent you should charge so you’re not expecting too much. And be 90003 sure 90004 the rent coming in each month adequately covers expenses like maintenance, HOA fees and homeowner’s insurance. Otherwise, you will not make any money! 90007

90052 Happy Tenants Are 90003 Easier 90004 Tenants 90053

90002 If you do happen to manage the place yourself, do the right thing and contact your tenants every few months to make sure they do not have any concerns.A simple email will usually work. 90003 Do not 90004 call them every week and make unannounced visits. You should honor their privacy, but let them know you’re available if they have any issues.Before tenants move in, make sure the hot water and heating and cooling systems work well. If your rental is a house, get a professional 90015 home inspection 90016 before you rent it to fix any urgent repairs. 90003 90004 90007

90012 When Should You Consider Investing in a Rental Property? 90013

90002 Okay, I really want you to hear me loud and clear here, people.You should be debt-free before you think about buying a place to rent. You should also have a fully funded emergency fund, which means 3-6 months of expenses covered. 90007

90044
90002 «You should be debt-free before you think about buying a place to rent.» 90007

90002 -Chris Hogan 90007

90051

90002 Having 90015 an emergency fund when you’re a landlord 90016 is 90003 especially 90004 important because of unpredictable events like repairs, missed rent or periods in between renters.90007

90002 And like I said earlier, being able to pay in cash is key to funding any real estate deal. You know what I’m going to say here: You should also be investing 15% of your monthly income into retirement accounts such as 401 (k) s and / or IRAs, and 90003 still 90004 be able to keep this up once you ‘ ve bought your rental. 90007

90002 No source of passive income is worth it if it puts you into debt or cuts into any of your other financial goals! 90007

90012 Get Help From a Professional 90013

90002 Okay, if you’re still wondering if a rental investment is right for you and you’re not sure where to invest, then you need the help of a good real estate agent to guide you.90007

90002 This is too big of a decision to make alone, and these guys are pros when it comes to the local market and all the details of buying and selling. 90007

90002 Take my advice and get connected with an Endorsed Local Provider (ELP) in your area who you can trust. 90015 Find a real estate agent today! 90016 90007

90002 90007

90164 About Chris Hogan 90165

90002 90003 Chris Hogan is a # 1 national best-selling author, dynamic speaker, and financial expert.For more than a decade, Hogan has served at Ramsey Solutions, spreading a message of hope to audiences across the country as a financial coach and Ramsey Personality. Hogan challenges and equips people to take control of their money and reach their financial goals through national TV appearances, 90004 The Chris Hogan Show 90003, and live events across the nation. His second book, 90004 90015 Everyday Millionaires: How Ordinary People Built Extraordinary Wealth-And How You Can Too 90016 90003, is based on the largest study of millionaires ever conducted.You can follow Chris Hogan on Twitter and Instagram at @ ChrisHogan360 and online at 90015 chrishogan360.com 90016 or facebook.com/chrishogan360. 90004 90007

.90000 Is Passive Income Real Estate The Right Strategy For You 90001
90002 90003 Key Takeaways 90004 90005
90006
90007 90003 Passive income real estate is an investing strategy through which earnings can be created with a loose level of involvement. 90004 90010
90007 90003 Those wondering how to invest in passive income real estate can first examine rental properties. 90004 90010
90007 90003 Individuals should always know the right questions to ask before investing in a passive income property.90004 90010
90019
90020
90002 90003 Passive income real estate 90004 is known as one of the best ways to gain an additional source of revenue, attain security in retirement, and ultimately design a roadmap to achieving financial freedom. However, passive income real estate investing is not necessarily the right fit for every investor. Would you like to take a more active role in real estate investing, or a relatively passive role? Read on to learn all about passive income real estate, and see whether or not it sounds like a good fit for your investing personality type.90005
90025 What Is Passive Income Real Estate? 90026
90002 Passive income real estate is a strategy through which an investor can create earnings without having to be actively involved. The term «passive income» is used loosely, as the level of required activity and involvement varies based on the investment type. Some common examples include rental properties, or earnings made from investment portfolios. 90005
90020
90002 90031 [Do you control your finances or are your finances controlling you? 90032 Find out how real estate investing can put you on the path toward financial independence.Register to attend a FREE real estate class, upcoming in your area. ] 90005
90020
90002 90036 90005
90025 How To Invest In Passive Income Real Estate 90026
90002 Passive income can be a great way to supplement your current income, as well as help you create financial streams to help secure your retirement years. One of the most popular ways to generate real estate passive income is through rental properties. Investors who play their cards right can create a steady revenue from rental income, while they also have the option to make improvements to the property and build equity.90005
90002 There is a common misperception that passive income real estate investing requires little to no work. However, those interested in creating passive income with real estate should plan to take an active role in what should be treated like a business. Whether it be searching through properties, screening tenants, hiring a property manager, or addressing repairs, owning passive income properties does require a certain level of involvement. This especially rings true for those who wish to maximize their profits.90005
90002 One of the keys to building a successful passive income real estate investment involves planning and creating a sound business strategy. This includes versing yourself in your target market, whether it be the same neighborhood as your primary residence or even out-of-state, so that you are aware of local real estate trends and values. The information you glean from the real estate market will help you pick out the best possible market to hold a passive income property, as well as identify property listings that promise good cash flow.After the research phase transitions into the execution phase, you will also need to have a strategy in place on how you will manage tenants, finances and paperwork, as well as the property itself. As you can see, passive income real estate is quite a complex process, and perhaps the term «passive» is a little deceiving. However, with plenty of planning, research, as well as knowing the right questions to ask or common mistakes to avoid, you will be well on your way to a sound strategy that can make your life much easier in the long-run.90005
90025 Rookie Passive Income Investor Mistakes To Avoid 90026
90006
90007
90002 90003 Not having enough cash flow: 90004 You may have heard the phrase «cash is king,» and any passive income real estate professional would tell you the same. When owning a rental property, your main goal is to gain appreciation while earning a steady cash flow. However, the market can fluctuate over time and affect your appreciation. Cash flow becomes your bottom line in terms of providing an income and being able to take care of your property.90005
90010
90007
90002 90003 Failing to thoroughly screen tenants: 90004 One of the best ways to maximize your passive income from real estate is by leasing only to the best possible tenants. A bad tenant can turn out to be much more expensive than any vacancy, such as through property damage or even a lengthy, expensive eviction process (or worse, a lawsuit.) Take the time to property screen your tenants, and be sure to check their records and references. 90005
90010
90007
90002 90003 Not being ready to become a landlord: 90004 Newbie investors might choose the approach of a passive income real estate investment vehicle without realizing that being a landlord is tough business that should not be taken lightly.Be sure to understand that managing rental properties should be approached as if it were a small business. 90005
90010
90007
90002 90003 Not collecting rent in a timely manner: 90004 It is important for new landlords to be very clear about rules, and hold tenants accountable for following these rules, from the very beginning. Tenants may take advantage of their landlord’s kindness and create a pattern of being late on rent payments, or even have a problem catching up. Waiting too long to collect rent will not only hurt your cash flow, it can lead to a delayed eviction process that can lead to hostile emotions on either end.90005
90010
90007
90002 90003 Not keeping an active role in management: 90004 Even when going through a property management company, an owner should actively manage their property by means of keeping in regular contact with tenants and providing regular care and maintenance of the property. Although this may require extra time, effort and cost, it will help protect your bottom line in the long-run. Proper management of a property can help reduce tenant turnover, improve property value, as well as prevent avoidable repairs costs.90005
90010
90019
90025 15 Different Ways To Create Passive Income In Real Estate 90026
90006
90007
90002 90003 Single-family units: 90004 Those wondering how to create passive income in real estate can start off with the most common of examples. Perhaps the simplest type of property to understand, a single home or condo can be purchased and rented out to just one tenant. Single-family tenants tend to take more psychological ownership over the home, leading them to take better care of the property.However, when vacant, a single unit will bring in no income at all. 90005
90010
90007
90002 90003 Duplexes, triplexes and more: 90004 Properties with two to four units offer similar benefits to single-family units while offering a lower requirement for intensive management when compared to apartment complexes. Due to the increased number of tenants, these properties can be a little tougher to manage than a single-family unit, yet tend to provide a better cash flow prospective. The risk of a potential vacancy is spread across multiple units instead of just one.90005
90010
90007
90002 90003 Apartment buildings: 90004 This building classification is often applied to properties with five or more units. Investors are able to take out a commercial loan, instead of a residential loan, and enjoy economies of scale. However, they should be prepared for more intensive management or to hire a property management professional. 90005
90010
90007
90002 90003 Commercial buildings: 90004 Commercial properties can be leased to retail tenants with long-term leases, thus promising a more stable stream of income.However, commercial tenants can be more difficult to replace, and tend to highly customize the property to their business needs. Investors should plan for longer vacancies, as well as having to consumer the cost of remodeling spaces between tenants. 90005
90010
90007
90002 90003 Mixed use developments: 90004 Demand for mixed use development projects has increased steadily, and can provide a home for residential, office, retail, industrial and institutional tenants. Investors can enjoy a variety of income streams and lease lengths within one property.90005
90010
90007
90002 90003 Industrial complexes: 90004 Although residential properties tend to come to mind with the mention of passive income, properties geared toward the commercial sector need not be ignored. Commercial warehouse, storage or manufacturing facilities can provide steady performance while requiring minimal management. It should be noted that tenant turnover can lead to extended vacancies. 90005
90010
90007
90002 90003 Self-storage facilities: 90004 Self-storage facilities continue to be very much in demand and can be found almost anywhere in the U.S. All facility costs and vacancies can be spread across many units, equating to a relatively low per-unit cost. However, these facilities require a customer service and management team, often staffing the premises for extended hours. In addition, owners should factor in security and insurance expenses. 90005
90010
90007
90002 90003 Mobile home parks: 90004 Mobile homes offer an attractive housing option for residents under economic stress, or in markets where housing prices have skyrocketed.Investors who own a mobile home park typically own the land, while collecting rents from residents who choose to locate their mobile home on the property. Because this investment is quite capital-intensive, investors will often go into the deal as a part of a fund, or in multiple partnerships. 90005
90010
90007
90002 90003 Land lots: 90004 Investing in land in itself can be a unique niche, and can be used to improve or split up to be sold as smaller lots. This strategy can be effective if the invest finds a plot of land in an area that is up-and-coming or will soon be developed, and sells it for a profit.However, land can be tricky, as there are very little ways to produce an income while it sits empty. 90005
90010
90007
90002 90003 Vacation rentals: 90004 A property might pose as a good short-term or vacation rental candidate, especially in markets with a significant transient population, as well as tourist attractions. Investors who own a vacation rental can often charge more on a per-night basis, than they would with a long-term tenant. However, vacation rentals require constant scheduling, dealing with cancellations, paying for housekeeping services, and worrying about slow seasons.90005
90010
90007
90002 90003 Real Estate Investment Trusts (REITs): 90004 REITs can be thought of as a mutual fund, and offer individuals with an opportunity to invest in the real estate sector while remaining completely passive. The target of REITs are usually high-end or commercial properties, and can fluctuate in correlation with the general stock market. 90005
90010
90007
90002 90003 Tax liens & deeds: 90004 The government reserve the right to seize a property when taxes go unpaid.Investors have the opportunity to buy up tax lien properties at a significant discount, but should only take action if they have a solid strategy in place. 90005
90010
90007
90002 90003 Note investments: 90004 Homebuyers have the option of taking out a home loan in the form of a private note, instead of a conventional loan. There is a large market surrounding the buying and selling of these notes, some of which are delinquent. Investors can purchase performing and non-performing notes from other owners at a discount.This provides them with the right to collect monthly payments or take ownership of the property if the property owner fails to make payments. 90005
90010
90007
90002 90003 Hard money lending: 90004 Investors who have sufficient liquidity can consider privately lending money to help other individuals purchase property, who promise to pay back the principal at a high interest rate. The end user is often a fix-and-flip investor who needs quick access to liquidity to jump on a deal. However, there is always a risk that the deal will not go well and the borrower will default.90005
90010
90007
90002 90003 Property rehabs: 90004 Fixing and flipping properties requires a more active role in real estate investing, but can be quite lucrative. Properties that are located in a promising rental market, but are not up to par in terms of appearance and condition, can go through a rehab phase before being rented out. 90005
90010
90019
90025 Questions To Ask Before Investing In A Passive Income Property 90026
90002 By knowing the right questions to ask, individuals can make as much of an informed decision as possible.Passive income real estate investing is no exception to this rule. Asking as many questions as possible before going into an investment deal represents a critical part of minding due diligence, and is a step that should never be skipped. The guide below provides a list of critical questions to ask before investing in a passive income property, along with considerations for each: 90005
90002 90179 90005
90002 If you are searching for a stable method of building financial freedom over time, then perhaps 90182 passive income real estate 90183 is just the right investment strategy for you.However, if you have gleaned anything from the discussion above, it should be that the word «passive» can be somewhat deceiving. Any investor should always head into a deal with the resolve to mind their due diligence, ask the right questions, and provide the level of commitment and involvement as required to make that specific investment strategy successful. 90005
90002 Which method of creating passive income through real estate did you find the most appealing or interesting? Feel free to share in the comments below.90005
.90000 30 Passive Income Ideas You Can Use to Build Real Wealth 90001 90002 Passive income is highly sought after and often misunderstood. 90003 90002 Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work these income streams start to build and are able to maintain themselves, bringing you consistent revenue without much effort on your part. 90003 90002 Speaking from personal experience, adding passive income streams to your portfolio can help you increase your earnings and accelerate your financial goals in tremendous ways.90003 90002 For example, you can use passive income streams to help you get out of debt or achieve financial independence sooner. 90003 90002 90011 Promo Offer: 90012 CIT Bank 90011. 90012 This account currently pays 1.00% APY, which is one of the highest interest rates you can get! Open a CIT Bank Money Market account here >> 90003 90002 If you want to get started earning passive income here’s what you should know first. 90003 90002 If you want to skip straight to the ideas, here you go: 90003 30 Best Passive Income Ideas 90002 Or just want to see my favorites? Check out this video of my top ways to earn a passive income and then check out the links below: 90003 90022 What It Takes To Earn Passive Income 90023 90002 Before we get into the passive income ideas I think it’s a good idea to first clear up a couple of misconceptions.Although the word «passive» makes it sound like you have to do nothing to bring in the income this just is not true. All passive income streams will require at least one of the following two elements: 90003 90002 1) An upfront monetary investment, or 90003 90002 2) An upfront time investment 90003 90002 You can not earn residual income without being willing to provide at least one of these two. Today, I have a big list of passive income ideas you can try regardless of the category you fall in. 90003 90022 Passive Income Ideas Requiring an Upfront Monetary Investment 90023 90002 These types of passive income require you to invest money up front to generate the passive income later.Do not be alarmed though — you can start with as little as $ 5 with some of these ideas, so it’s achievable for everyone. 90003 90036 1. Dividend Stocks 90037 90002 90011 90012 Dividend stocks are tried and true way to earn passive income. You will have to do plenty of research to find good stocks and invest a significant amount of money to receive large dividend checks. However, if you consistently invest money into dividend stocks you can amass a nice residual income over time. 90003 90002 For any of these investment opportunities, make sure you open an account at the best online brokerage, and get rewards while doing it.90003 90002 Our favorite place to invest is 90011 M1 Finance 90012. You might not have heard of M1 Finance, but it’s a 90011 FREE 90012 investing platform that allows you to build a portfolio, and invest in it for free. 90003 90002 This is amazing for investing in dividend stocks because you can build your portfolio of, say, 30 stocks. Then, your investments will be auto-allocated to your entire portfolio every deposit — for FREE! You can even auto-rebalance. Then, your dividends can also be reinvested.It’s a fantastic platform, and it was made for this. 90003 90002 Read our full M1 Finance review here. 90003 90002 90011 90012 Open an IRA at M1 to day >> 90003 90036 2. Peer to Peer Lending 90037 90002 P2P lending is the practice of loaning money to borrowers who typically do not qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is 90011 Lending Club 90012.You can read our full lending club review here: Lending Club Review. 90003 90002 What’s great about Lending Club is that investors are earning 4-6% returns on average — and that’s all passive income. You simply lend your money, and you get paid back principal and interest on that loan. 90003 90002 The median return on cash flow is 4.1% — which is better than any money market fund you’re going to find today. This also makes Lending Club my favorite CD alternative. 90003 90036 3. Rental Properties 90037 90002 90011 90012 A cash flowing rental property is a fantastic way to bring in a monthly income.To make this truly passive you can outsource the running of the properties to a management company. 90003 90002 However, the internet has made investing in rental properties easier than ever before. There are a lot of ways you can invest in rental properties depending on what your goals and interests are. You can be a limited partner in large residential or commercial properties, or you can buy homes and be a landlord — all online! 90003 90002 90011 Invest In Single Family Homes 90012 90003 90002 If you’re looking for a more traditional path to real estate investment, check out 90011 Roofstock 90012.This company allows you to buy cash-flow positive single family rentals — online! You can sign up and start searching properties today. Check out Roofstock here. 90003 90002 The great thing about using a platform versus doing it yourself is that the income is even more passive. Check out our full Roofstock review here. 90003 90002 90011 Invest In Larger Developments 90012 90003 90002 Do you not want to be a landlord, but still want real estate exposure and income? Then consider being a limited partner in a large development.With these options, you can invest in multi-family or commercial properties. You get the income and tax treatment just like regular real estate ownership, but you do not do any of the work! 90003 90002 Our favorite platform for this is 90011 RealtyMogul 90012 because you get the flexibility to invest as little as $ 1,000, but can also participate in REITs and private placements — typically not offered to the public. Investors can fund real estate loans to gain passive income or buy an equity share in a property for potential appreciation.Their platform is open to both accredited and non-accredited investors. 90003 90002 Read our full RealtyMogul review here. 90003 90002 90011 Invest In Farmland 90012 90003 90002 Farmland is not sexy, but it has a lot going for it when it comes to real estate investing. It’s slow, steady, pays consistent rent, and everyone needs to eat. That’s were AcreTrader comes in. 90003 90002 Plus, compared to other types of real estate its much less volatile. The easiest way to invest in farmland is via AcreTrader.Check out our AcreTrader review here and see how to get started. 90003 90002 90011 For Accredited Investors 90012 90003 90002 One of my favorite ways to get started with rental properties is through EquityMultiple. Similar to LendingClub, you can start investing in real estate for as little as $ 5,000 at platforms like 90011 EquityMultiple 90012. 90003 90002 This platform has a nice mix of smaller residential to mixed use residential and commercial properties. Read our full EquityMultiple review here.90003 90036 4. High Yield Savings Accounts And Money Market Funds 90037 90002 If you do not want to think much about your money, but want it to work for you, a basic place to put it is in a high yield savings account or money market fund. 90003 90002 The difference is in the account type and where it’s located. Typically, high yield savings accounts are located at banks, and are FDIC insured. Money market funds can be located at both banks and investment companies, and are only 90121 sometimes 90122 FDIC insured.90003 90002 Interest rates have been rising, so putting more money into a savings account can generate a safe passive income stream. 90003 90002 CIT Bank consistently has a compelling savings account offer, with a 0.95% APY and no fees, and FDIC insurance. Check it out here >> 90003 90002 If you want the most up to date rates on savings accounts and money markets, check out these lists that we update the rates daily on: 90003 90036 5. CD Ladders 90037 90002 90011 90012 Building a CD Ladder requires buying CDs (certificates of deposits) from banks in certain increments so that you can earn a higher return on your money.CDs are offered by banks and since they are a low risk investment they also yield a low return. This is a good option for the risk averse. 90003 90002 For example, what you do if you want a five-year CD ladder is you do the following. Look how the rates rise over different time periods (these are estimated): 90003 90138 90139 1 Year CD — 2.50% 90140 90139 2 Year CD — 2.90% 90140 90139 3 Year CD — 3.05% 90140 90139 4 Year CD — 3.10% 90140 90139 5 Year CD — 3.15% 90140 90149 90002 If building a CD Ladder sounds complicated, you can also stick to a traditional high yield savings account or money market fund.While the returns are not as amazing as other things on this list, it’s better than nothing, and it’s truly passive income! 90003 90002 We recommend building a CD Ladder at 90011 CIT Bank 90012 because they have one of the best CD products available. High rates and even a penalty-free CD option (which currently earns 0.75% APY). Check out CIT Bank here. 90003 90002 Check out these great deals on the best high yield CDs on our full list of 90011 the best CD rates that get updated daily 90012.90003 90036 6. Annuities 90037 90002 90011 90012 Annuities are an insurance product that you pay for but can then provide you passive income for life in the form of monthly payments. The terms with annuities vary and are not always a great deal so it’s best to talk to a trusted financial advisor if you’re interested in purchasing an annuity. 90003 90002 These investments are not for everyone — they can come with high fees, and not be worth it. But if you have zero risk tolerance for loss, and are looking for a passive income stream, this could be a good potential idea for you your portfolio.90003 90036 7. Invest Automatically In The Stock Market 90037 90002 If you’re not interested in picking dividend paying stocks (and I can understand that), there are still ways to invest passively in the stock market. You can automatically invest in various ways through what’s called a robo-advisor. 90003 90002 A robo-advisor is just like what it sounds like — a robotic financial advisor. You spend about 10 minutes answering a few questions and setting up your account, and the system will take it from there.90003 90002 The most popular robo-advisor is Betterment — which you can setup to automatically invest in and they will handle the rest for you. What’s great about Betterment is that they charge one of the lowest fees in the robo-advisor industry, and they make it really easy to invest automatically. 90003 90002 Plus, Betterment is currently doing a promotion where you can get up to 1 year free! Read our full Betterment review here. 90003 90002 Sign up for Betterment here and get started investing for a passive income! 90003 90036 8.Invest In A REIT (Real Estate Investment Trust) 90037 90002 If you’re concerned about investing directly in real estate, or maybe you’re not yet an accredited investor, that’s okay. You can still take advantage of real estate in your investments through REITs — Real Estate Investment Trusts. 90003 90002 These are investment vehicles that hold property within them — and you as the owner get to benefit from the gains, refinances, sale, income (or loss) on the property. 90003 90002 Our favorite platform to invest in a REIT is Fundrise.They only have a $ 500 minimum to get started and offer a variety of options we love as well! 90003 90002 Check out our full Fundrise review here. 90003 90036 9. Refinance Your Mortgage 90037 90002 This may sound strange in a passive income article, but refinancing your mortgage can be a great way to free up a lot of income and save you $ 100,000s over the life of your loan. That’s a pretty good gain in my book. 90003 90002 Right now, interest rates are still near historic lows, and if you have not checked out your mortgage lately, now’s a great time to shop around and compare rates.If you can save 0.50% or more on your loan, you’re potentially adding tens of thousands of dollars back into your pocket. Not many investments can beat that. 90003 90002 We like using services like 90011 LendingTree 90012 to compare the best rates. You can also check out these online mortgage lenders. 90003 90036 10. Pay Off Or Reduce Debt 90037 90002 Along the same lines as refinancing your mortgage, if you can pay off or reduce your debt, you’re making huge progress in building income. But just like other things in this topic — it takes a monetary investment to make that happen.90003 90002 The great thing about paying off debt is that it’s a straight return. If you have a credit card at 10% interest, paying it off is a 10% return on your money! That’s huge. 90003 90002 There’s two approaches you can take with debt: refinance or consolidate, or balance transfer and pay down. 90003 90002 If you have student loan debt, it could make a lot of sense to refinance the debt. You can see if it makes sense in 2 minutes at Credible 90011 without a hard credit check. 90012 If you decide to proceed, College Investor readers get up to a $ 750 gift card bonus when they refinance through this link.90003 90002 Read our full Credible review here. 90003 90002 If you have credit cards or other debt, it can make sense to consolidate with a personal loan. This is typically the best option when you can not see yourself paying off the debt in a year, but want to lower your interest. Credible also allows you to compare personal loan options, so check it out here and see if it makes sense. 90003 90002 Finally, you could get a 0% balance transfer card and use your 0% time to pay off the debt. There are some credit cards right now that offer 15 months at 0% with no fees — that gives you over a year to pay off your debt.Learn more about these cards here. 90003 90036 11. Invest In A Business 90037 90002 Another way to generate passive income is to invest and be a silent partner in a business. This is very risky, but with risk comes the potential for high returns. For example, several years ago both Lyft and Uber were looking for private investors to invest in their companies. Today, they are worth billions — but you as an investor would only reap that benefit if they go public via an IPO, or get acquired. So, it’s risky.90003 90002 But there are ways to reduce your risk. For example, you can invest small amounts in many companies through lending them money in small bonds. 90003 90002 There are now tools available where you can loan money to a business and get paid a solid return for doing it! 90003 90002 There are two popular options — both of which provide a 5% annual return — passively! 90003 90002 90011 Worthy 90012 90011 90012 — Invest in bonds that yield 5% annually. They take your funds and lend it to small businesses.Check out Worthy here and get started for as little as $ 10. Read our full Worthy review here. 90003 90002 90011 StreetShares 90012 — Invest in bonds that yield 5% annually. This company takes your funds and invests specifically in veteran backed businesses. Check out StreetShares here and get started for $ 25. Read our full StreetShares review here. 90003 90022 Passive Income Ideas Requiring an Upfront Time Investment 90023 90002 The next section of passive income ideas require a time investment.Instead of using money, you need to put in sweat equity to make these happen. 90003 90002 Almost all of these ideas require starting a personal blog or website. But the great thing about that is that it’s incredibly cheap to do. We recommend using Bluehost to get started. You get a free domain name and hosting starts at just $ 2.95 per month — a deal that you will not find many other places online! You can afford that to start building a passive income stream. 90003 90036 12. Sell an eBook Online 90037 90002 90011 90012 Self Publishing is mainstream today.When you purchase an eBook off of Amazon there’s a pretty good chance you’re buying a self-published book. Self-publishing is also ridiculously easy. I tried this a few years ago and could not believe how simple the process was. 90003 90002 To self-publish a book you’ll first need to write and edit it, create a cover, and then upload to a program such as Amazon’s Kindle Direct Publishing. Do not expect instant success though. There will need to be a lot of upfront marketing before you can turn this into a passive income stream.90003 90036 13. Create a Course on Udemy 90037 90002 90011 90012 Udemy is an online platform that lets its user take video courses on a wide array of subjects. Instead of being a consumer on Udemy you can instead be a producer, create your own video course, and allow users to purchase it. This is a fantastic option if you are highly knowledgeable in a specific subject matter. This can also be a great way to turn traditional tutoring into a passive income stream! 90003 90002 Check out Udemy here to get started >> 90003 90036 14.Selling Stock Photos 90037 90002 90011 90012 Do you ever wonder where your favorite websites, blogs, and sometimes even magazines get their photos? These are normally bought from stock photo websites. If you enjoy photography you can submit your photos to stock photo sites and receive a commission every time someone purchases one of them. 90003 90002 One of the biggest marketplaces to sell stock photos is DepositPhotos. You can upload your photos are earn money whenever someone uses them. 90003 90002 In fact, check out this awesome story of one of our scholarship contestants who turned photography into a stock photo business.90003 90036 15. Licensing Music 90037 90002 Just like stock photos you can license and earn a royalty off of your music when someone chooses to use it. Music is often licensed for YouTube Videos, commercials, and more. 90003 90002 With the amount of YouTube videos and podcasts that are being created, there is more demand than ever for music — and people are willing to pay for it. 90003 90002 The key way to do it is to get your music in a library that people can search. Check out this guide on how to license your music.90003 90036 16. Create an App 90037 90002 90011 90012 If you own a smartphone or tablet then it’s safe to assume you have several apps downloaded. But have you ever had an amazing idea for an app? If so, you could consider hiring a programmer to create your app for you. You could then sell it on the App store for residual income. 90003 90036 17. Affiliate Marketing 90037 90002 90011 90012 Affiliate marketing is the practice of partnering with a company (becoming their affiliate) to receive a commission on a product.This method of generating income works the best for those with blogs and websites. Even then, it takes a long time to build up before it becomes passive. 90003 90002 If you want to get started with affiliate marketing check out this course on affiliate marketing and how to become a full time blogger. 90003 90036 18. Network Marketing 90037 90002 90011 90012 Network marketing, or multi-level marketing, seems to be on the rise. Companies such as Young Living Oils, Avon, Pampered Chef, and AdvoCare are all multi-level marketing companies.You can earn passive income through network marketing by building a team underneath you (often referred to as a down line.) Once you have a large team you can earn commissions off of their sales without having to do much. 90003 90036 19. Design T-Shirts 90037 90002 90011 90012 Sites like Cafe Press allow users to custom design items like T-shirts. If your design becomes popular and makes sales you’ll be able to earn royalties. 90003 90002 Even Amazon has gotten into this business. Amazon has a new service called Amazon Merch, where you simply upload your designs and Amazon takes care of the rest (making it, packing it, and shipping it).90003 90036 20. Sell Digital Files on Etsy 90037 90002 90011 90012 I’ve been into home décor lately and I had to turn to Etsy to find exactly what I wanted. I ended up purchasing digital files of the artwork I wanted printed out! The seller had made a bunch of wall art, digitized, and listed it on Etsy for instant download. There are other popular digital files on Etsy as well such as monthly planners. If you’re into graphic design this could be an amazing passive income idea for you. 90003 90022 Semi-Passive Small Business Ideas 90023 90002 I call these semi-passive income because they are more like a business, less like the ideas above.They all also require a small combination of time and money investment. But once you invest, you can earn more income and typically do so passively. 90003 90002 However, these all do require some ongoing time investment, so they are not 100% passive like having a savings account. 90003 90036 21. List Your Place On Airbnb 90037 90002 90011 90012 If you have a house, apartment, spare room, or even backyard, consider listing your property on AirBNB and start earning money when you get your place booked.Sign up y our place today. 90003 90002 AirBNB is great because you can earn money on a space you already own. It does require a little work up front to prep your place, list it, and clean up after guests, but it’s pretty passive otherwise. 90003 90036 22. Car Wash 90037 90002 90011 90012 It’s always been a dream of mine to own a car wash. This seems like such a great way to earn a semi-passive income. While regular maintenance will be needed at a car wash it’s something you can either hire out or perform once a week.90003 90002 As a side note, I’m talking about the really basic car wash that is cinderblocks, a pressure washer, and coin operated. If you’re going to run a drive through car wash, it’s definitely a business vs. a passive income stream. 90003 90036 23. Rent Out Your Car 90037 90002 Similar to listing your place for rent, you can also list your car for rent. This can be truly passive because once you list your car, it can earn you income when you’re not using it! 90003 90002 Our favorite partner to rent your car is 90011 Turo 90012.Turo allows you to put your car out for rent, and when people rent it, Turo handles the rest! 90003 90002 The cool thing with Turo is that, depending on your location and what kind of car you have, you can make a decent passive income! 90003 90002 Check out Turo here and get started earning passive income with your car! Check out our list of other ways to make money with your car as well (most of the others are not passive though). 90003 90036 24. Vending Machines 90037 90002 90011 90012 Vending machines are another great low maintenance small business idea.I have a friend who has vending machines all over neighboring towns. He replenishes and cashes them out once every two weeks. His vending machine business is part of his retirement plan. 90003 90036 25. Storage Rentals 90037 90002 90011 90012 My cousin owns a set of storage rentals and receives monthly checks for letting customers rent these out. The only time she seems to do any work for these is when she has an opening for one of the storage units. 90003 90002 If you’re not sure about getting into this space, you can also invest in storage rentals via a REIT.90003 90036 26. Laundromat 90037 90002 90011 90012 I debated on listing this one here because while in theory it seems like owning a laundromat would be semi-passive I anticipate there would be a whole lot of ongoing maintenance needed. You be the judge on this one. 90003 90022 Easy Passive Income Ideas 90023 90002 Last on the list I wanted to point out a couple of easy passive income ideas. These require no money and no upfront work. While the earnings are menial you still can not beat easy passive income! 90003 90036 27.Cashback Rewards Cards 90037 90002 90011 90012 If you pay your bills with a credit card make sure it offers cash back rewards. You can let your rewards accrue for a while and possibly put the easy money you earned toward another passive income venture! (Be sure that the card you select does not have an annual fee or you might be cancelling out your rewards). Check out this list of the best Cashback Rewards Cards. 90003 90036 28. Cashback Sites 90037 90002 90011 90012 Just like cashback rewards cards you should opt to use a cashback site when shopping online.If you do not you’re giving up free money that requires little to no work! We just compared the two most popular sites — Rakuten versus TopCashBack. 90003 90036 29. Get Paid To Have An App On Your Phone 90037 90002 What if you could install an app on your phone, and get paid for it? Yes, this app tracks what you’re doing and it sells your data — but what’s more passive than that? 90003 90002 If you do not want to do anything out of the norm, check out Neilson Digital. You simply download the app and do what you normally do.The app runs in the background and you are entered to win rewards. Simple, easy way to get money for nothing! Download the app here. 90003 90002 Mobile Expression is a similar app for iPad. You can earn rewards for installing it and leaving it on your device for at least 90 days. And boom! You get paid! 90003 90036 30. Save Up To 30% On Your Electric Bill 90037 90002 Let’s mark this one as passive saving versus passive income, but every little bit helps when you’re looking at your bottom line.90003 90002 90011 Truebill 90012 is an app that helps you save money by identifying recurring subscriptions and other bills and helping you cut costs by negotiating better rates and fees. One of their partnerships is with Acradia Power, which has the potential to save you up to 30% on your electric bill. It searches for better power rates in areas where competition is allowed, and it locks in the better prices for you. 90003 90002 Read our full Truebill review here. 90003 90002 Check out Truebill here and see how much you can save.90003 90022 How to Get Started 90023 90002 While it can be tempting to want to pick five passive income ideas to get started with I’d really encourage you to pick one in the beginning. You need time and the ability to focus to really a grow a passive income stream. Master one thing before moving on to the other. 90003 90002 It’s going to take a substantial amount of time or money in the beginning but I promise earning passive income is everything it’s cracked up to be! Pick an idea, make a plan, and dedicate yourself until that income stream comes to fruition.90003 90002 90022 Frequently Asked Questions 90023 90003 90002 90011 How do I generate passive income? 90012 90003 90002 Passive income is the idea that you deploy time and / or money and receive income with no further work. You have to do something to generate passive income up front, but then you can rely on that income into the future. 90003 90002 90011 What are some examples of passive income? 90012 90003 90002 Investing is a great example of passive income. You invest money in a company stock, and you receive a dividend payment and appreciation on the investment.Another popular example is real estate. You buy a property, and you enjoy the rent as passive income. 90003 90002 90011 Does passive income really work? 90012 90003 90002 Yes! Passive income is how the rich continue to build wealth. When you do not have money, you can leverage your time and effort to create income streams that will grow into the future. As you accumulate money, you can deploy that money (and even combine it with your time) to generate more and more passive income. 90003 90002 90011 Where can I invest to have passive income? 90012 90003 90002 If you want to invest to generate passive income, dividend stocks and mutual funds are great ways to do it.You can also invest in debt instruments, like bonds. 90435 If you want a safer approach, you can invest in a money market account or CD to get a risk-free return on your money. 90003 90002 90011 What are the most popular passive income ideas? 90012 90003 90002 There are lots of popular passive income ideas. The most popular include investing in the stock market, owning real estate, investing in a business, and even simply keeping your money in a high yield savings account. All of these approaches generate passive income, but they do require up front capital.90003 90002 90011 Does passive income really require «no work»? 90012 90003 90002 This is a myth. Passive income always requires something up front: time or money. However, the idea that it becomes passive after you do the work is what’s alluring about it. For example, you spend 6 months writing a book, and you can enjoy the royalty income from your book for the rest of your life without any further work. 90435 That’s not to say that doing more work will not boost your income, but there is an element that requires nothing more to earn.90003 90002 90011 90121 What are some of your favorite passive income ideas? 90122 90012 90003.90000 Rental Income: Active or Passive 90001 90002 90003 2020-01-10 90004 Tax law specifies that all rental activities are passive activities, even if the landlord is a material participant, unless the taxpayer is a qualified real estate professional or the rental businesses are classified as active businesses by the tax code. Hence, losses from rentals can only be deducted from other passive income. 90005 Rental income 90006 is any income received for the use of tangible, either real or personal, property.The tax code provides material participation rules that distinguishes active from passive activity. If at least 1 of the material participation rules is satisfied, then rental income can be classified as active income only if it satisfies one of the following exceptions; otherwise it must be classified as passive income even if the taxpayer is a material participant. However, there is an exception for deducting up to $ 25,000 of rental losses against active or portfolio income if active participation tests are satisfied, even if the material participation tests are not.However, the $ 25,000 rental loss allowance phases out for taxpayers with incomes exceeding $ 100,000, phasing out completely at $ 150,000. 90007 90002 90005 Example: 90006 So if you own a number of homes that you rent out to the public, and spend 60 hours a month in the business, it will still be classified as a passive activity even though you spend more than 500 hours a year in its operation unless you satisfy one of the following exceptions. 90007 90002 90005 Exception 1 90006. The average rental period is 7 days or less.This exception is provided because there is a presumption that for short-term rentals, such as for the rental of intangible property like automobiles, tools, or other property, the taxpayer must expend considerably more effort to service the business then would be required for long -term rentals. 90007 90002 If a taxpayer rents a vacation unit for 7 days or less, any losses are treated as active losses that can be deducted from active income if the taxpayer meets the material participation test.In any case, it does not qualify for the $ 25,000 rental loss allowance since it is not treated as a rental property. 90007 90002 90005 Exception 2 90006. The use of the property averages 30 days or less, and the owner provides significant personal services. For this exception to apply, the taxpayer must show that he provided significant services. Proof consists of the frequency of services provided, the amount and type of labor that is required for the activity, and the value of the services to the amount charged for the use of the property.90007 90002 Personal services do not include services that are required: 90007 90024 90025 for lawful uses of the property; 90026 90025 for construction or repair services that extend the useful life of the property; or 90026 90025 for services that are provided for long-term maintenance of high-grade commercial or residential real property, such as cleaning and maintenance, trash collection, and the provision of security. 90026 90031 90002 For Exceptions 1 and 2, if more than 1 class of property is rented out, then the rental period is averaged within each class.90007 90002 Average Period = Gross Rental Income from That Class / Total Rental Income from the Activity 90007 90002 90005 Exception 3. 90006 The main purpose of the business is to render personal services, so the rental of the property is incidental to the main business. For instance, for a college that rents out dormitories, the dormitories are incidental to the service of providing education. Likewise, a hospital room rental is incidental to the provision of health services. With this exception, the rental period is immaterial.90007 90002 90005 Exception 4. 90006 The rental business is incidental to the main activity of the taxpayer. This exception was written to prevent the conversion of active or portfolio income into passive income so that passive losses can be deducted from it. The tax code specifies that the following types of rentals are not passive activities: 90007 90024 90025 If gross rent income is less than 2% of the lesser of the unadjusted basis or the fair market value of the property, then this exception is satisfied for: 90024 90025 Property held primarily for investment.90026 90025 Property that was used by the taxpayer in a trade or business either during the tax year or during at least 2 of the 5 preceding tax years. 90026 90031 90026 90025 This exception also applies to the following property rentals: 90024 90025 Property held for sale to the general public but rented in the meantime. So if a car dealer rents out used cars until they are sold, then this exception applies. 90026 90025 Property rentals by a partner to a partnership. 90026 90025 An employer renting lodging to an employee so that the employee can perform services for the employer.90026 90031 90026 90031 90002 90005 Example: 90006 If you own raw land with a fair market value of $ 300,000 and has an unadjusted basis of $ 200,000, and you rent the land to a farmer for $ 3,000, then the land rental is not considered a passive activity , since $ 3,000 <.02 × $ 200,000. 90007 90002 90005 Exception 5. 90006 The property is available during defined business hours for nonexclusive use by customers, such as public golf courses, even if they provide monthly or annual passes to some of its customers.Partnerships or S corporations can only qualify for Exception 5 if their primary activity is not rentals. 90007 90002 90005 Exception 6. 90006 If a taxpayer rents property to a partnership, S corporation, or joint venture in which the taxpayer owns an interest, then the customers are treated as licensees rather than lessees. 90007 90002 For the above listed exceptions, the $ 25,000 real estate rental loss allowance does not apply. 90007 90002 The rental of a personal residence is considered a nonpassive rental activity if the taxpayer uses the home for more than the greater of 14 days or 10% of the days that the home is rented out for a fair market rental value.90007 90080 Rental and Non-Rental Business Activities Can not Be Combined 90081 90002 Activities involving the rental of real property and personal property can not be combined into a single activity unless there is a natural connection between the 2. For instance, if you rent a furnished apartment , then the activity can be considered a single activity even though you are renting both realty and personal property. 90007 90002 Rental and non-rental business activities may be combined if they make an appropriate economic unit and one of the activities is considered insubstantial to the other, or if the business owners have a proportionate ownership in both the rental activity and the non-rental business and the businesses form a natural combination.90007 90080 Real Estate Professionals Can Treat Rental Income as Active Income 90081 90002 Real estate professionals can treat their rental income as active income rather than passive income, thus allowing losses from the rental activity to offset any other income. The tax code defines 90005 real estate professional 90006 as (1) one in which more than 50% of the personal services performed by the taxpayer were in the real estate business, which can involve real property development or construction, acquisition, conversion, operation, management, rental or leasing, or a brokerage business - but not real estate financing - and (2) the taxpayer performed more than 750 hours of service in 90091 each activity 90092, defined as a separate business or property, but since the activities can be aggregated, the 90091 each activity 90092 requirement is not much of a restriction.If a married couple is engaged in the activity, then at least 1 of the spouses must satisfy both of the above tests. A real estate professional can not be an employee unless she owns more than a 5% interest in the employer. However, the real estate professional rules do not apply to real estate rentals that are combined with another business activity. A closely held C corporation can qualify under the rules if at least 50% of its receipts are from the real estate business in which it materially participates.90007 90002 Each activity in a rental interest is treated as a separate activity unless the taxpayer elects to aggregate them on Schedule E, Supplemental Income and Loss. If the activities are not aggregated, then the taxpayer would have to satisfy the above 2 rules for each property. However, the rental loss allowance can still be used for any properties for which the taxpayer does not qualify as a real estate professional, so up to $ 25,000 of losses from those properties can be combined with any losses from the other properties to offset nonpassive income.90007 90002 If the taxpayer makes the election to aggregate the activities, then it can not be changed in subsequent years unless there is a material change in the nature of the activity or permission is granted by the IRS, even if there are intervening years in which the taxpayer would not qualify as a real estate professional. Another disadvantage is that suspended losses can not be applied to the sale of any rental properties until the entire interest is disposed of. 90007 90002 Generally, a real estate interest held by a partnership or S corporation is treated as an aggregate interest if the business entity treats it as such; otherwise, the real estate interests are treated as separate for the investor, which will also be the case if the taxpayer holds at least a 50% interest in the capital, income, gain, loss, deduction, or credit in a partnership or S corporation for the tax year, unless the taxpayer elects to aggregate all the real estate interests held individually and as an interest in the business entity.If the interest is held as a limited partnership interest, then the limited partner must satisfy Rules 1, 5, or 6 of the material participation tests - specifically, did the limited partner actively participate for at least 500 hours during the tax year or did he actively participate in the same activity in previous years - to satisfy the material participation rules, which will also apply if the taxpayer decides to aggregate the limited partner interest with other real estate interests. However, there is a de minimis exception that allows a taxpayer to aggregate all the real estate rental activities by satisfying any 1 of the 7 material participation tests if less than 10% of the gross rental income for the tax year is attributed to the limited partnership interest.90007 90080 References 90081.