Over the years, we’ve all contemplated investing our money either short-term or long-term but have convinced ourselves that it isn’t worth the risk. This pandemic has left millions of people in financial distress, not to mention the health scares that countless people have suffered from. With the looming threats of lockdown and outbreaks, it is important now more than ever to have passive sources of income. Passive income refers to a stream of income where the owner is not actively involved. With passive income, your money makes money for you through investment returns. Investing in property has proved to be a great choice for those looking to generate passive income, and here is why
1. Making money while you sleep:
Through passive income, you can generate wealth without actively working for it. With a smart and informed property purchase, you can appreciate your property value and secure gains in no time! This wealth can easily become the foundation of your retirement fund, or be used to pay off debts, fund your children’s education, or simply build your savings. One way or another, investing in real estate puts you on the path to financial freedom.
2. Creating multiple income streams:
The same property can be used multiple ways to generate multiple streams of income. One of the most popular ways to do this is by renting out to multiple tenants, keeping your income stream steady.
3. Risk diversification:
It is relatively easy to diversify your real estate portfolio due to the sheer number of different types of real estate. In doing so, you not only expand your portfolio, but diversify your risks by investing in different types of real estate, their different uses and varied local markets such as residential real estate, and land.
4. Leverage:
In case you need to increase your cash flow, you can use borrowed capital to fund other real estate investments. Leveraging property improves your buying power and allows you to invest in large income generating properties thereby diversifying your portfolio.
5. Stability & Emotional Security:
Property is a tangible asset. You can see it, feel it and of course, live in it. Owning a tangible asset has value, the intrinsic value of the land and the added emotional value of owning and belonging. Tangibility also offers relative stability, as they do not swing as hard as stock markets do.
