Real estate investing can be a great way to earn passive income. Once you’ve done your homework, invested in a property, and found someone to pay for its use each month, you can sit back and enjoy that steady check.
Of course, most buildings will require a significant amount of repairs and maintenance over time, so you’ll need to factor in the time and money it takes to manage that. And if you’re doing all of this yourself, it’s not really passive income, so you may need to hire a property manager.
But what if your real estate investment didn’t have buildings you need to worry about? This could be a huge plus for your bottom line. Let’s explore some of the less common ways to earn passive income with real estate, without construction. With any of the following options, you can invest directly yourself or with real estate investment trusts (REITs) that own these types of properties.
Most investors who consider real estate imagine a building of some kind taking into account the equation. But there are several ways to earn passive income with vacant land. It might be worth checking to see if you can find a good deal on a large piece of land in the right area. There is a high probability that its value will only increase as demand increases, and there are several potential ways to use it to generate passive income.
Your options will of course depend on the size of the parcel, the characteristics of the land, its location and what the zoning will allow. You would want to go in with an idea of what you would like to do and make sure that would be an option with the land you are considering. Possibilities include turning the property into a hunting lease or renting it out as farmland. You can also plant wood on a part of the property you are not renting and sell the wood when the time comes or simply have more value on the land if you choose to sell later.
Advertising has come a long way over the years. We even talked about how the advertising potential of the metaverse could impact real-world real estate. But classics are classics for a reason, and that certainly goes for billboards.
While television and radio stations can be changed or silenced, traffic creates a captive audience for a display message. And there are situations where nothing else would do – like a massive, appetizing shot of food right before the exit where drivers can enjoy that meal.
To rent a billboard, you must first ensure that you will be able to obtain a license for a billboard in the area you are interested in. If so, you will get a long-term ground lease on the small piece of land where you would erect the billboard. Of course, if you already own a property where a billboard could work well, even better. Finally, set up your billboard and find an advertiser. It could be as simple as putting your details on the notice board.
Mobile home parks
When you think of passive real estate investing where you collect rent for the space where people live, you probably think of single or multi-family homes. But with the average mobile home park, you simply rent the land that your residents’ mobile homes are on. When renting a home you own, the maintenance and repairs needed mean you’ll need a property manager if you want a truly passive investment.
But with a mobile home park, your only concerns are maintaining the road in the park and all outdoor common areas and collecting rent. Residents are even responsible for maintaining their own yard. And with housing affordability becoming an increasingly pressing concern, now could be a good time to invest here.
Should we consider an unconventional real estate investment?
While these three methods for generating passive income with real estate are all unconventional, it’s important to note that none of them are new or untested. They have all been generating passive income for investors for many years. They simply don’t get the attention that more traditional real estate investment avenues, like home rentals or commercial property rentals, do.
If any of these passive income generation methods have piqued your interest, they are worth exploring further and could be a great way to diversify your portfolio.