Buying a rental property is often touted as a way to generate passive income, but the reality is far from effortless. From finding the right property to dealing with maintenance and tenant issues, the income derived from rental properties requires active management.
Enter real estate investment trusts (REITs), a better alternative for those seeking passive income from real estate. These entities own income-producing properties and distribute dividends to investors. By investing in high-quality REITs like Camden Property Trust, Invitation Homes, Realty Income, Sun Communities, and W.P. Carey, individuals can earn substantial annual income with a smaller initial investment.
Camden Property Trust, for example, focuses on residential apartments and has a history of increasing dividends through strategic property acquisitions. Invitation Homes specializes in single-family rental homes, constantly adding new homes to its portfolio. With Realty Income’s diversified property holdings and long-term net leases, stable income growth is almost guaranteed. Sun Communities focuses on manufactured home communities and RV parks, while W.P. Carey is transitioning its portfolio to focus on industrial and warehouse properties.
Unlike rental properties, REITs provide truly passive income with fixed dividends that tend to increase each year. With the ability to start small and gradually expand their investment, individuals can build a real estate empire and achieve financial freedom through passive income.
