Could You Be Earning Passive Rental Property Income Without Becoming A Landlord?

Buying up residences and renting them out for profit can be a lucrative business plan, as evidenced by America’s continually rising rental prices.

But there are some aspects of becoming a landlord that immediately turn off many prospective investors. Two increasingly popular options, on the other hand, promise the upside of rental income without the downsides associated with being a landlord. Let’s explore them both:

• Real Estate Investment Trusts: This option is popular among investors who aren’t interested in the day-to-day maintenance of rental property. A leading REIT, The Monthly Dividend Company, has been offering services for more than half a century and boasts a staggering 652 monthly dividends in a row. In fact, the rules associated with forming such a trust require that it return 90% or more of all taxable income in the form of dividends paid out to investors. With a dividend yield at or around 5.37% these days, the typical monthly payment is just over a quarter per share. Before investing, however, it’s important to remember that those dividends are not guaranteed and prices can go up or down sharply without notice.
• Fractional investments: Amazon founder Jeff Bezos has been a driving force behind this alternative, which essentially allows investors to purchase shares in rental properties. It’s possible to get started with an investment of as little as $100, so it appeals to many people who might want to test the waters before making a major commitment. The Bezos-backed company Arrived Homes even offers investors access to a Private Credit Fund, which provides monthly payments and returns with an annual target yield of 7-9%.

Making big money in the rental market means making big investments, but these two options might help level the playing field in an industry that has become dominated by huge corporations.

Chris Agee November 7th, 2024

Share this story: