Many of us are used to hustling to make money, whether by plugging away at our jobs or taking on side work to boost our income. Those are fine things to do. But there may be an easier way to make money without having to lift a finger — investing in real estate.
In fact, real estate investing is one of your best options for generating passive income. That’s the sort of income you get by sitting back and doing nothing.
Now you’re probably thinking, “Well, that all sounds great. But I don’t have the money to make a down payment on an income property or flip a house.” That’s understandable. Many investors are short on funds these days thanks to rampant inflation.
But you have other options for generating passive income through real estate investing. And one in particular doesn’t require a large up-front investment at all.
Limited funds need not be an issue
It’s a big misconception that investing in real estate has to mean buying actual property. There’s actually an easier way to get into real estate — and it doesn’t require a large amount of money at all.
If you buy REITs, or real estate investment trusts, you can put your money into companies that own and operate different properties. And from there, you can enjoy a steady stream of passive income. That’s because REITs not only pay dividends, but they’re higher-than-average dividends, since these companies are required to pay 90% of their net income to investors in dividend form.
Now within the realm of REITs, there are different sectors you can look at. Right now, it could be smart to put money into industrial REITs, which operate warehouses and distribution centers. With digital sales so popular, the need for industrial space is likely to increase in the coming years, so it’s a good corner of the market to look at.
Furthermore, as digital sales soar, the need to securely house data is apt to increase. That makes data center REITs another solid option to look at.
These are just a couple of REIT sectors worth putting on your radar. It pays to learn more about REITs and see which ones fit into your investing strategy.
How much money do you need to buy REITs?
Just as each stock has its own share price, REITs also trade at different values. But many brokerage accounts today allow you to buy fractional shares of REITs. This means that if a given REIT’s share price is beyond your budget, you can buy a portion of a share instead.
In fact, even if you only have $50 to invest with, you can go out and buy REIT shares (or fractional shares) and start your real estate investing career. In that scenario, your goal should be to ramp up and build a larger portfolio over time. But your takeaway here is that limited funds shouldn’t get in your way of pursuing what could be a very easy opportunity to generate income without having to do a thing.