Real estate normally appreciates, which provides you with passive income. You can even invest in foreclosures or short sales to save money on the purchase and have more significant capital gains. However, investors just starting out typically stick to single-family homes, townhomes, or condos. You can invest in just about any type of property, including commercial properties. Think of home appreciation as the 'bonus' you earn when you sell the property and as an addition to the passive income you already earned. In addition, when you sell the property, you get to keep the difference between the purchase price and the home's current value minus your outstanding home loan if you have one. As the home appreciates in value, you are the one earning the capital gains. Even though you aren't living in the property, you are the owner. Not only do you earn the monthly cash flow, but you also earn appreciation in the home. But, there is a passive income component to it. After all, you are a landlord and responsible for everything to do with the home. You might think that investing in real estate properties isn't exactly passive income. It's a great form of passive income that pays you often and regularly. What's better than a rental property that creates cash flow? With monthly cash flow, you can reach your financial goals faster, or if you want to expand your real estate investing portfolio, you can save the money to buy more properties. Passive real estate investments are a great way to diversify your portfolio and make more money to reach your goals, whether they be financial independence, growing retirement accounts, or just saving more money for other financial goals. Ideally, passive income streams should pay you dividends or interest, and if it's real estate, appreciate over time without you doing much of anything. For some forms of passive income, you'll put in the work upfront or have to do 'some work' to earn money, but not like working a 9 to 5 job, for example. Passive income is money you earn without having to work for it actively. Whether you want to own real estate properties outright or you'd prefer an indirect method to create passive income, there is a method for every type of investor. There are three great ways to earn passive income from real estate investing. If you're wondering how to earn passive income from real estate, you're in luck.
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