What is Passive Income from Rental Investment ?

Passive income is an incredible tool that everyone should include in their retirement plans. With traditional investing you have to rely on the stock market to increase your investments over time. The longer you have your money invested, the more your money will grow. The stock market does not produce passive income, except in the form of dividends. Most dividends are extremely small and produce small returns on investment. The bulk of stock market returns come from an increase in stock market prices. The only way to realize those increase in value is to sell stock. Retirement calculators that use the stock market as an investment plan on you running out of money when you die because you have to sell all your investments to keep bringing money in.

Rental properties if bought right, produce cash flow every month. They keep producing cash flow as long as you own the property and you never have to sell the property. 

REITs are real estate investment trusts and produce dividends like stocks, but usually pay out at a higher level. I don’t invest in REITs, because I feel they are more similar to stocks than an actual real estate investment.

• Notes are loans that investors hold against business or property. When you pay your mortgage every month you are creating passive income for the bank. Investors can also buy notes, which create passive income every month as long as the notes are paid.

• Private money is money that is given by a private investor to a business or investor and can have real estate used as collateral. Private money is similar to notes, but the loan was not originated with a bank.

• Businesses can also produce passive income if they are set up correctly. if you have a team in place that can handle all the day-to-day activity and you collect checks, that is a pretty passive investment.

There are investments that will give you passive income that don’t involve you selling your investment.

The great part about creating truly passive income is the money comes in every month without you having to sell your investment or worry about running out of money when you retire. 

This information is brought to you by Kingdom Estate Realty LLC

Joe Goh is a Licensed Texas Realtor with DFWTEXASPROPERTY covering Dallas-Fort-worth. For more information, go to www.dfwtexasproperty.com