Financial planners say real estate is the main source of passive income

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Financial planners say their clients overwhelmingly turn to one source of passive income: the property.

Insider spoke to several financial planners, asking each where their clients are earning the most passive income. They told us that one of the most common forms passive income they see real estate among clients.

However, they noted that not all of their clients are landlords, property and apartment managers. Instead, they turn to two other methods of generating passive income with less hassle.

They invest through real estate investments or income trusts.

Rather than owning their own real estate, some investors simply buy shares in a larger real estate portfolio. Financial planner John Boward from Sloping wealth said some of his clients are investing in real estate this way.

These real estate investment funds or REIT, as they are called, come in many forms. Until REIT available on some investment platforms, Bovard’s clients are focusing on OTC REITs that offer monthly income.

Clients invest in

REIT
and the company takes care of the management. “[The company is] come out and they buy these huge portfolios of real estate. Then, my clients, they will invest $ 100,000 in the fund, and this money will be blocked for 12 months, ”he said.

“Every month they receive a monthly distribution from this fund, and then they also own part of this basic real estate. They can also participate in increasing the value of this property, ”he said.

These non-listed REITs are only available through a financial planner and have minimum income or net worth requirements. However, there are publicly traded options that offer income on a quarterly basis. Either way, REITs can help generate passive income without the need to directly own real estate.

They “break into the house” to turn their own home into income

Financial planner and Facet Wealth co-founder Brent Weiss said his clients use their homes to generate passive income.

Home burglary, or buying a house with rented room or separate block to generate passive income has become a popular way for his clients to make money from real estate.

“Probably half of my clients now think differently about real estate,” he said. “How can I buy a home for myself and my family? And how then can I rent out this extra shed with a fully equipped kitchen and everything else behind? ”

According to Weiss’s experience with clients, this is an effective way to start earning passive income from real estate. While this will require some work on the part of the landlord, it may not require significant additional investment.

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