Real Estate is a great source of generating passive income. It means properties, land, and buildings are considered as real estate. This sector is very popular and recognized globally. People used to generate a high amount of passive income through real estate. You can buy or sell properties to generate passive income.
Properties like a house or any other type of property is a great type of asset. You can get a high amount of returns by this. The values of these assets increase by time. You can also invest in real estate investment trust (REIT) which is like buying stocks from the share market. They also give you a good amount of return.
You can also flip houses to generate income for which you have to work. Holding an asset itself increase in its amount alike liabilities which decreases in their value.
I know a person who is very much into this thing. He also spends so much time with family. He is very good to make a deal and he knows the real worth of the properties and he also has a great knowledge of properties and he also knows how much time is perfect for holding property. The worth of his properties gave him so much of passive income.
What’s in it for me?
- Investing in the real estate business
- Generate profit in the real estate business
- Working of real estate business
- Real Estate Passive income vs Active income
- Passive income by Real estate vs Passive income by Stocks
- Passive income by Real estate vs Passive income by rental
- Conclusion
- FAQs
Investing in real estate business
You can invest in it by buying and selling properties. If you want to buy a property you either go on your own and find a property or you contact a broker or agent to find a suitable property for you and for this service he charges you. This is how investing in it looks.
Generate profit in the real estate business
When you have your property you can hold it as much time as you want and try to wait for the perfect opportunity. Some people will pay a good amount and some people will not for the same piece of land. So be patient and search for good people who have a high need for that property. You can find a buyer on your own or you can contact an agent or broker. Then he will find you a deal and if you find this good enough you sell your property and you get profit.
Working of real estate business
It works as it increases in value and individuals can generate profit. Brokers and agents take some amount of this as they make the deal happen. They find you a good deal.
In the book Rich Dad Poor Dad the author said that always give good amounts to brokers as they will bring you a good deal and eventually you will generate money and only a good broker or agent will make you rich and it takes only one perfect deal to change everything.
If you want to buy a property you either go on your own and find a property or you contact a broker or agent to find a suitable property for you and for this service he charges you. Then you make a deal with the owner and then you get the property and after that, it is up to you for how much time you want to hold that property after that property will increase in its value, and then you will try to sell it. You can find a buyer on your own or you can again contact an agent or broker.
Then he will find you a deal and if you find this good enough you sell your property and you get profit. You just have to buy and sell a property, many people make a lot of money by this. Some people also able to double up the amount invested and have so much profit via real estate. I think real estate properties are a great asset.
Passive income vs Active income
| Real estate passive income | Real estate active income |
| You have the independence of time. | You do not have the independence of time. |
| This income is generated via an increase in the rate of the property as a form of profit. | You can take this as a business and generate income only by selling and buying properties. |
| Income generated from it works as a side income for you. | This is the main income you generate and your living is dependent upon this. |
| You mostly work with brokers and real estate agents. | You do not work with brokers and agents. |
Real estate vs Stocks
| Passive Income by Real Estate | Passive Income by Stocks |
| The passive income we generate from properties and real estate investment trust (REIT). | The passive income we generate from investing in the share market. |
| You can buy an asset in a physical form like land, house, or any other kind of property. | In stocks, you invest in any company which utilizes your money to grow their business and eventually your investment gains profit. |
| Profits in it mostly depend upon seller or broker or real estate agent. | Profit is only dependent upon the market and company. |
| You can make a profit on your own as it depends upon your skills to convince the buyer this means you can manipulate your profit. | You can not manipulate profit it only depends upon markets nature. |
Real estate vs Rental
| Passive income by real estate | Passive income by rental |
| We can buy and sell properties. | We can rent properties for residential, commercial, or industrial usage. |
| The passive income we generate from properties and real estate investment trust (REIT). | The passive income we generate from renting out our properties. |
| We generate profit by buying and selling properties. | We get passive income by monthly rent. |
| In real estate, we get money only a single time when we sell the property. | We get money every month as rent and it is like a fixed income which we get every month. |
Conclusion
Real estate is one of the many ways of generating passive income. A high amount of money can be generated with proper research. You can invest your money in real estate by different means.
How profit is generated and how this all works, everything is discussed in this blog. We compared passive income from real estate with different sources. So now you can take a look at some of the frequently asked questions.
FAQs
The income you generate from real estate is called as real estate income. Some people only depend upon it for their monthly living like brokers and agents and some people generate this income as a form of passive income. So income generated by it can be passive as well as active.
The amount we can generate by it depends upon many factors like the location of the property, the month or season, or any other particular condition. The returns are higher when there is high demand. It works the same as any other product if demand increases price also increases and if demand decreases price also decreases.
Anybody above 18 in India can invest in it or I can say that buys or sell the property. For investing and buying or selling you need a pan card as it is mandatory.
Yes, income generated from it is taxable as we have to give tax return on the income unless it is a vacant property, self living property or some other kinds of properties, these type of properties are not taxable and all other types of properties are taxable.
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