Living in the 21st century nowadays, having only one active income is not enough to be financially stable. You need to have a second job, like a part-time job, aside from your full-time job to have additional income. Yet there is another way of earning money without doing anything, and it is called passive income.
Having a passive income is like having any kind of business where you will earn money even though you are not around. You may have a water refilling station, laundry services, leasing services, a small grocery store, etc., which can make your life easier to earn income. And the other kind of business is the rental business, where you allow the tenants to use either your house, apartment, resort, or condominium. And from that, you will generate passive income.
In the examples given below, you have the chance to earn passive income. For instance, you can use your condo unit as your rental property. Here, you will find someone who is willing to pay a price for your property. Some are offering their condo units with a one-year contract as an agreement that they will stay in the condo unit for one year. And some of the options require a one-month advance and a one-month deposit, as per the price given by the owner.
1. Long-Term Residential Rentals
A long-term rental is considered renting a property within 30 days (one month) or more than a month. Here, a renter will be paying monthly rent to the condo owner of the property. There is a long-term contract for long-term tenants, which is their agreement on how long they will stay; it could be one month, three months, six months, or even a year if they want to stay in that condo for that long. Earning a passive income in this way is very beneficial.
Long-term rentals provide additional stability for landlords. You may rest easy knowing that your property is in safe hands if you hire property management and have long-term renters. You are guaranteed tenancy for the foreseeable future and will not be exhausted or intimidated by the idea of finding another renter.
2. Short-Term Residential Rentals
In contrast with long-term rentals, short-term rentals are considered renting a property for a week or less, which is called ultra-short-term rentals. An example of this is if someone is renting a condo unit for a short period of vacation, having a business meeting, etc.
The difference between short-term rental and long-term rental is that you may have different tenants within a month, yet the possibility of having them is unsure as compared to long-term rental, where there is a contract that they will pay for your rental property. But here you will be receiving higher rent, even though they just stay for a short period of time.
In addition, this short-term rental comes with a lot of upkeep expenditures, so keep that in mind when deciding how much to charge. Maintenance entails cleaning the unit, laundry, and (if necessary) repairs, so you’ll need to pay someone to accomplish those tasks.
Here are some exciting amenities to attract renters:
It should be Instagrammable to attract potential tenants. Many young professionals are looking for things that are aesthetically pleasing to their eyes, and social media is on trend. They are now looking for a place that is good for their mental health and suits their personality. Seeing beautiful surroundings from inside the condo to outside is a plus for them.
Accessible Location. It is more convenient for the tenants if they find a condo unit that has an accessible location to the market, church, bank, mall, school, or even their workplace. It greatly affects their decision to choose the best condo for them.
Home Automation. Another plus point for your property is if it has automation features like a smart bulb, a smart door lock, CCTV cameras, and other devices that can be connected to their phones and enabled by voice control. Many condominiums have these features now that we are in the modern world.
Space for a garage. For tenants who have their own service, it will be a good thing to consider. Yet, it is an additional fee for them.
Swimming pool. It is undeniable that a swimming pool adds to the amenity of the condo; most renters prefer a condominium with a swimming pool and bar.
3. Lease out the unit to a number of tenants.
There are so many options on how to lease your property to new tenants. Since COVID-19 restrictions are now lifted and it is now required for students to go to school physically, online classes are now limited. Workers are also required to work on-site. And many people are now on vacation. It is the right time to lease your condo units or buy a new one. It is an investment property where you will invest your money in real estate investing.
Though your return on investment will not come within a few years, at least you have the assurance that you will receive your money back since the value of this kind of property has an appreciating market value.
And since many are looking for a place where they can live, you may offer them your condo for a few months or at least a year. And as the condo owner, you may create a lease contract that contains the agreement between you, the owner, and the number of tenants.
4. Real estate property as an investment
There are a lot of types of real estate in which you can invest your hard-earned money. You can invest in these different kinds of real estate properties that can also turn into rental properties:
Residential. Townhouses, condominiums, apartments, houses, and lots are all examples of residences. A licensed real estate agent might help you acquire one.
Commercial. Malls, retail centers, commercial offices, educational facilities, and health facilities are just a few examples of commercial property where you can have passive income.
Land is a vacant lot, farm, road, or any undeveloped property that can be cultivated and turned into more profitable passive income real estate.
Industrial. Warehouses and buildings or plots of land where things are made are included. This category also includes buildings used for research, storage, and distribution.
By investing, you will have financial freedom and retirement security as you grow older.
5. Buying a presale condo
Preselling condominiums provides the most up-to-date design, features, and amenities for customers to enjoy if they wish to rest and unwind outside their acquired condo property. Some condo developers provide smart condominiums as an extra security element to keep up with current and digital times. Investing in a preselling condo entails paying today’s price for tomorrow’s equity.
After the condo is built and ready for occupancy, you may profit by selling the condo unit at the current market price. After the condo property is done, you may rent it out and generate a consistent stream of revenue. In this situation, purchasing a pre-sale condo allows you to carefully select the unit that will be preferred by your future tenants. Many first-time investors choose preselling condos due to their reduced price, which may be more than 30% less than a ready-for-occupation unit. Apart from that, there are developers that provide extra discounts or flexible and extended payment terms, with a down payment as little as 10% payable over three years and a lump sum to be paid either by bank or the developer’s in-house finance. Preselling condominiums is an excellent investment for real estate investors since their market value will undoubtedly improve by the time they are done.
Some people acquire pre-sold condominiums and resell them for a higher price after they are completed. Preselling condominiums allows you to select your chosen unit and floor layout. Better views, quicker access to facilities, and reduced foot traffic are all options. You can also check the unit towards the conclusion of the building process and notify the developer of any problems or concerns that need to be remedied, depending on the pre-sale contract.
6. Real Estate Investment Trust (REIT)
Individuals can engage in large-scale, income-producing real estate through real estate investment trusts (“REITs”). A REIT is a firm that owns and often runs income-producing real estate or associated assets. Office buildings, shopping malls, residences, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans are examples.
A REIT, unlike other real estate businesses, does not construct real estate properties for the purpose of reselling them. A REIT, on the other hand, buys and develops buildings largely for the purpose of operating them as part of its own investment portfolio. Individual investors can get a piece of the revenue generated by commercial real estate ownership through REITs without actually purchasing commercial real estate.
