If you are considering earning passive income from real estate, you’re in good company. More than 10 million Americans currently earn passive income from real estate investment, with the majority renting out second homes as rental properties. Real estate is the most stable and valuable investment anyone can have in their portfolio.

It is the only asset that has consistently appreciated in value over the years, as rent and US property prices continue to rise to unprecedented heights. However, owning passive income rental property is easier said than done. In order to get it right, you need the know-how. With that in mind, here is your guide to finding the best real estate investments for passive income in 2021.

1. Learn from the Best

Many people mistakenly assume that creating passive income from real estate is a matter of just buying any old house and renting it out to anyone. This is a potentially ruinous illusion to hold. Successfully knowing how to make passive income from real estate requires expert knowledge of markets, funding, legal requirements, and marketing.

For this, you should learn from the best. You can read more here about how to take an online real estate investment course that will teach you everything you need to know, offered by real-world investors who have made it big. 

2. Know Your Options

Making passive income from real estate investment means knowing what your investment options are. As a first-time investor, there are many roads you can go down. The right choice depends on your local market, your capital holdings, and your goals. You could choose to buy a single-family home in the suburbs. You could invest in a condo for young professionals. You could even invest in student housing. Do your research to find out the right option for you. 

3. Assess Your Funding

You cannot be a successful investor if you are not realistic about your funding. Ideally, you should be able to pay for your investment property in cash. However, this is not an option for most people. You can get a mortgage for an investment property, but remember that this will be significantly more difficult than securing a mortgage for an owner-occupied home. You can look at real estate funding pools to club your resources with other investors. Make sure you are fully aware of what each funding option entails. 

4. Look at the Market Carefully

Before you can make passive income, you need to know your market inside and out. You need to know what average rental prices are in your area so that you can price your property competitively. You need to have a thorough understanding of demand and supply, as well as the income and demographics of your target renters. When choosing the right investment properties, always trust the numbers above what anyone else tells you. 

More Tips for Earning Passive Income from Real Estate

If you found the tips for making passive income from real estate useful, there is plenty more where that came from. Make sure to consult our expert guides to Real Estate Investment to find out how you can secure your future with property today.