2024-05-26 06:25:00 ET
Investing in rental properties is one of the many ways to generate passive income. However, like everything else, this investment strategy has its benefits and drawbacks.
A big negative is the large up-front investment needed to purchase a property and make it ready to rent. With the average home price in the country approaching $500,000, it can cost more than $100,000 to purchase a rental property when factoring in closing costs, down payment, repairs, and marketing costs.
Thankfully, you don't need anywhere near $100,000 to start investing in rental properties. A much lower cost (and even more passive) approach is to invest in a real estate investment trust ( REIT ). Many REITs have share prices of less than $100 and pay dividends on a quarterly or monthly basis. Invitation Homes (NYSE: INVH) and Equity Residential (NYSE: EQR) are great rental property alternatives.
For further details see:
Want to Invest in Rental Properties, but Don't Have $100,000? Here's How to Start Collecting Passive Income from Real Estate for Less Than $100.