Turning earned income into passive income sounds like a great idea, but is possible in today’s economy? Absolutely, especially if you become a real estate investor. While there are certainly many ways to earn passive income, let’s look at how real estate investing offers great wealth-building potential.
4 Ways to Use Real Estate Investing to Turn Earned Income Into Passive Income
1. House Hacking
No, we’re not talking about tearing down a home and selling its pieces and parts to earn a profit! House hacking refers to a low-cost real estate strategy that is often used by investors when they first enter the world of rental properties.
The process is simple. Start by using your earned income to purchase a piece of property that has more than one unit. Then, you live in one unit while renting out the rest. Voila! As you pull in rental payments from tenants each month, you’ve turned earned income into passive income. When done wisely, you’ve also covered your own housing expense with someone else’s income (paid to you in rent).
2. Airbnb Properties
This real estate investing strategy is also relatively simple in concept. You use your earned income to purchase a property that can be rented out to individuals traveling through that area, typically on a short-term basis. Or, you can use property you already own and do the same. You can even rent out portions of a property, like a mother-in-law suite or spare room.
Since you don’t have to work like an employee or even be onsite to do short-term Airbnb rentals, most people consider this to be passive income. In order to make this a profitable venture, work with a real estate investing coach to ensure you know how to maximize profits, minimize expenses, and market your rental. Also, check out my video Airbnb vs. Long-Term Rentals to see which option is better for you.
3. Invest in Long-Term Rental Properties
This is one of my favorite ways to turn earned income into passive income because I’ve done it myself and proved its wealth building potential. Use your earned income to buy a rental property, ideally one with multiple units, and lease each unit out to tenants.
You’ll continue to receive rent month after month, year after year, for as long as you own the property. Again, working with a real estate investing mentor can help you pick properties that are located in high-demand areas, have low vacancy rates, and generate positive cash flow.
4. Invest in Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts allow you to invest in real estate without owning physical properties yourself. Instead, you’re putting your money into a pool of properties that are managed by someone else. This is one way you can turn earned income into passive income because you will receive regular dividend payments as long as the trust is profitable. The downside is that you may have little or no control over how the properties are managed.
Turn Earned Income Into Passive Income Through Real Estate Investing
Whether you earn income as an employee or you’re an entrepreneur, turning earned income into passive income with real estate investing is absolutely possible. The key is knowing exactly what to do and how to do it. You could spend significant time and effort researching the best real estate investing strategies on your own. Or, you could enlist the help of professionals who’ve already reached where you want to go.
As a business coach, I take pride in helping fellow entrepreneurs grow and scale their businesses so they can increase their income and have more options. Then, as a real estate investing coach, I help would-be real estate investors learn how to invest in real estate to earn passive income and achieve financial freedom.
My wealth-building blueprint has worked for others – why not let it work for you, too? Read my latest book, The New Rules for Financial Freedom, or apply to work with me so YOU can start turning your earned income into passive income TODAY!
