Investors are looking for the best opportunities to invest their money and earn passive income with less effort. Finding the best field to invest money that will grow wealth significantly is the nature of a true investor. If you have extra money to invest and earn handsome figures without effort, then you should look for passive income streams. Here we have listed a few major passive income streams for investors.
1. Real estate
Despite the rollercoaster graphs over the last two decades, real estate persists as a preferred choice for investors. Real estate helps to generate long-term returns continuously.
Invest in rental properties
Investing in rental properties is one of the most famous streams of passive income. Acquire a rental property and find a tenant who will flow money into your pocket. The initial investment can be steep but the payoff can be huge and last for many years.
Invest in REITs (Real Estate Investment Trusts)
Investors who do not want to manage rental properties but want to earn passive income can invest in REIT. This is more like a mutual fund that holds various real estate projects. Typically REITs pay out more dividends than stocks. However, liquidity and transparency are often lacking in the field of REITs. Taxed dividends income can be a headache for investors.
Real estate crowdfunding
Real estate crowdfunding is a newer way to invest. Crowdfunding enables people to purchase a percentage of commercial real estate projects that were available to billionaires or institutional investors. Investors can invest in equity or debt in both commercial and residential properties. CrowdStreet is one of the best platforms for real estate crowdfunding.
2. Joint ventures (JV)
A joint venture (JV) entity is forming when two or more people investing in a specific business or property. Investors can provide capital for starting and running the business whereas other partners will work to grow the business. Investors may remain as a silent partner and earn passive money from the business. Before investing you should take a look over the probability of the business.
3. Certificate of Deposit (CD)
Years ago Certificate of Deposit would produce a higher return as 4%+ yield. But now it does not produce that much. But still, it is a preferred option for investors. You are investing an amount for a certain time against a guaranteed return. You will receive more money when the investment gets matured.
4. Dividends investing
Dividend investing is one of the most preferred and simplest ways of passive income for investors. Public companies are generating and distributing their profits to the shareholders. The return may vary companies to company and year to year. The investors also have the choices to pull out the dividend or reinvest the money again in the company. During the pandemic dividend market was underperforming. But the dividend stocks are making a comeback.
5. Peer-to-peer lending (P2P)
P2P lending is also a best choice for investors to earn passive income. In mid 2000, LendingClub and Prosper stated P2P business. P2P business actually created those borrowers who have been denied by the banks or other institute to get loan at the cheap price. This business is web-based, where people looking for loans. Investors have chance to earn 5%-12% return.
These P2P platforms put a list of borrowers with their creadit history. You will see the reasons of borrowing. You as an investor just choose the best option to lend your money and sit back. Money will follow you back at a predetermined rate to your pocket.
Conclusions
Passive income investments can investors life simple and easy. Replacing your current income sources with passive income streams is an wise dicision for investors. We recommend you real estate options to play safe. Unlike stocks, real estate produces income, tangible assets and shelters. Also there is a possibility of increasing values and incomes from real estate.
