Are you looking to make some extra income, apart from what you already earn from your day job? Do you want it to make you money while you’re in dreamland? Then you should consider investing in passive income opportunities.
Passive income is gained through passive means — in other words, unlike active income, you don’t have to devote your time and effort on a regular basis to generate money. Not only will this help you bring in extra cash, but author Donna-Marie Coggins explains that it also sets you up for more financial stability and growth. Although some of your time would still be required, these methods are typically more laid-back and, depending on your situation, easier to manage.
Now is the time to start filling your portfolio, especially since the investment scene is becoming more accessible to newbie investors. News24 reports that big data is changing how people plan their investments, causing a shift from the traditional methods. In the past, investors would look through a company’s financial reports and business model before making a decision, but now, they’re analysing how other investors trade — imitating those who profit and ignoring those who don’t. These days, even new investors have access to data sets, allowing them to mimic veteran investors.
Aside from helping you build your wealth, investing also helps you stay ahead of rising inflation rates every year. However, before placing your money anywhere, investment experts recommend understanding your risk tolerance, as it determines what kind of ventures you’re comfortable with. To begin, we’re starting with our bread and butter — property investment. To learn some of the basics, check out this Free Accelerator Course that talks about goal setting and strategizing. It’ll give you a good idea of what to expect before delving into the specifics of property investment.
We’re firm in our belief that property investment is the most lucrative option, given that it provides better returns than other investment markets. Additionally, properties consistently increase in value over time, making it a useful and tangible asset in your possession. Finally, there are multiple ways to profit from the property investment sector. The SAPIN team previously listed eleven in total, including property development and renovation, but here are some of the most popular options:
The simplest way to invest in this sector is to rent out a residential property. If you don’t have a spare room, consider investing in a rental space to lease out for more long-term, consistent income. This will still require a heavy amount of capital and initial construction or arrangement. But once you’ve found tenants, things will go more smoothly, and you can anticipate extra income every month. Additionally, land does not depreciate. So, even if your rental space depreciates with age, the ground it’s on never will. You can hold on to it for a long period of time, then sell it when its value has increased through the years.
Another way to go about it is to rent out commercial property. While initial investment costs can be higher than its residential counterpart, the overall returns are higher, making this a lucrative property investment opportunity. There are different types of commercial properties, and each has different uses, so it’s important to do research beforehand. Offices, for example, are best put up for rent in business districts, while warehouses and storage facilities are a good idea for those with connections to delivery businesses.
Peer-to-Peer Property Crowdfunding
Properties are expensive, but it’s a lucrative investment that can benefit almost anyone. If you don’t have as much capital to invest in a property directly, consider peer-to-peer real property crowdfunding, which allows you to get the benefits of property investments minus the large capital and time needed. No longer will you have to manage a tenant or construction — all you have to do is shell out money and watch it grow. This is also a great way to diversify your portfolio, as you can invest across countries, property types, and currencies.
If you have underutilised property, consider joining the 150 million people who already have listings on Airbnb. Of course, doing this requires initial preparations such as cleaning the space and designing it to suit a tenant’s needs. But after this, passive income from Airbnb comes pretty easy. Find a price point by basing it off other spaces in your city, and then figure out how much cleaning fees, booking fees, and taxes will cost on top of that. The good thing about this form of passive income is that bookings made through Airbnb are paid online, so there are no chances of a guest not paying. However, it’s still important to get insurance in case of any unruly guests. If this sounds like something you’d want to try, head on over to The Property Academy for a free Airbnb course on how to increase profits. With the right Airbnb investment strategies, you’re sure to bring in some passive income.
As profitable as property investment is, it’s important to avoid focusing on just one means of earning it. This is done to diversify your portfolio, reduce risks, and maximise returns. Apart from property investment, there are many other options with varying levels of risk that are worth noting, such as the stock market, forex market, and the bond market. Just note that these investment markets are more volatile than that of property investment, so make sure to plan your moves carefully.
One way to invest in the stock market is through dividend-paying stocks. This entails investing in a company and them giving you a portion of their earnings on a regular basis. Payouts are usually given quarterly, but be wary, because if a company goes bankrupt, you’ll no longer receive payouts.
If you’re someone who keeps up with global news, consider applying your knowledge to foreign exchange trading. Just like with stocks, FXCM states how traders in the forex market buy and sell currencies based on where they think they are headed in terms of value. The key difference, however, is that exchange rates are fluctuating constantly. 1 GBP could get you 1.19 EUR today, but 1.20 EUR the next day. This might seem like a trivial change, but it can greatly affect large-scale trades.
Treasury Bonds or Bills
Another form of investment to consider is treasury bonds or bills. Bonds are long-term debt securities with a maturity between 10 and 20 years, while bills have shorter terms at 91, 181, and 364 days. Essentially, this investment entails loaning the government money, and them paying you back at a fixed interest rate, semi-annually, until maturity.
There are opportunities for passive income everywhere. Take note of the methods we’ve mentioned above to start making extra income, even while you sleep. But always remember that for these investments to be effective, it takes meticulous planning and plenty of effort. In the end, only those who are prepared to put in the hard work can reap the benefits of passive income in the years to come.
written for sapropertynetwork.com
by Richelle Jayne