The Secret of Passive Income
Updated: Nov 20, 2020
Have you ever dreamt about making money in your sleep? Of course, you have. Everyone does. Passive income is defined by Investopedia as “earnings derived from a rental property, limited partnership, or other enterprises in which a person is not actively involved.”
Even though the concept has been around for a long time, the idea of passive income has come to the front and center over the past decade or so, with article after article popping up about how you can make money without even trying.
When it comes to making a passive income through commercial real estate, there’s no one set path you need to follow in order to maximize your passive income.
The first option is to buy a retail space (think, a space in the local mall, or a physical store in a shopping center) and then rent it out to a tenant. This allows you to make money on rent every month (after paying any necessary bills to keep the lights on).The options are unlimited- if the moment strikes, you can even purchase an entire shopping center should you so desire.
Retail can also include healthcare facilities, as it’s not uncommon to find health clinics popping up in shopping centers all over the U.S., as residents search for options cheaper than a hospital or general practitioner.
Apartments or condos
The next is buying a block of apartment or condo units, as once you purchase more than a certain number of them (it depends on your state, in Florida it’s any number over 4) it qualifies as a commercial purchase. You rent them out to tenants, and you become the landlord, getting to take home some passive income at the end of each month.
There’s always a need for office spaces or co-working spaces. You can take advantage of this by buying a space (whether it’s a former warehouse, or retail space, or something in between) and renting out individual rooms or chunks of it to different companies (or if it’s a co-working space, to individuals who are willing to pay to rent a room for the day). Even in the age of remote work, sometimes it’s easier and more productive for employees to work from a coworking space than home, when the alternative gets to be too noisy, disruptive, or distracting.
If you’re able to find an empty restaurant space for sale in a good location, (especially if all the hookups for the kitchen appliances already exist) you’ve got a prime avenue of passive income waiting for you, once someone decides they want to rent that space from you and put their restaurant there. People always like to eat out, whether it’s in person, delivery, or take-out.
Online shopping is arguably bigger than ever right now, (with COVID-19 keeping many shoppers from entering physical stores) and with the holidays coming up, it’s going to become even more rampant. You can earn some extra money by buying a warehouse and then leasing it out to any number of companies who could use the space for the holiday rush or to finally upgrade from their previous shipping space.
Commercial real estate is one of the easiest ways to make passive income, while still being able to see your investment at work. You’ve already taken the first step by reading this blog post. If you’d like to look at the next steps, getting into the process of buying commercial real estate to start making passive income, feel free to reach out to us. We’d love to help you on your journey to achieving a passive income, in order to start living the life you dream of.