3 unconventional real estate investments that can generate passive income

RReal estate investing can be a great way to generate passive income. Once you’ve done your homework, invested in a property, and found someone who will pay to use it every month, you can sit back and enjoy the steady check.

Of course, most buildings will require a significant amount of repair and maintenance over time, so you’ll need to budget for the time and money it will take to do this. And if you’re doing all of this yourself, it’s not really passive income, so you might need to hire a property manager.

But what if your real estate investment doesn’t include any buildings to worry about? That could be a big plus for your bottom line. Let’s explore some of the less common ways you can earn passive income from real estate without a building. Using one of the following options, you can either invest directly yourself or with real estate investment trusts (REITs) that hold this type of property.

Two people in a corn field, one pointing into the distance.

Image source: Getty Images.

empty lot

Most investors when considering real estate envision a building entering the equation. However, there are several ways you can earn passive income from vacant land. It might be worth checking if you can find a good deal on a large lot in the right area. There is a high probability that its value will only increase as demand grows, and there are several ways you can use it to generate passive income.

Of course, your options depend on the size of the plot, the characteristics of the plot, its location and the possibilities of zoning. You should start with an idea of ​​what you want to do and make sure it would be an option for the country you are considering. It is possible to convert the property into a hunting lease or to lease it as farmland. You could also plant wood on a portion of the property you are not leasing and either sell the wood when the time comes or just have more value in the land if you decide to sell later.

Blank billboard in field with blue sky and mountains on background.

Image source: Getty Images.

billboards

Advertising has come a long way over the years. We even talked about how the Metaverse’s promotional potential might impact real-world properties. But the classics are classics for a reason, and that certainly applies to billboard advertising.

While TV and radio stations can be changed or muted, traffic creates a certain captivated audience for a promotional message. And there are times when nothing else will do—like a giant, delicious billboard photo of food right before the exit where drivers can enjoy that meal.

To rent a billboard you would first ensure that you are able to obtain a permit for a billboard in the area you are interested in. If this is the case, you would be given a long-term leasehold for the small lot on which you would place the billboard. Of course, if you already own a property where a billboard could work well, that’s even better. Finally set up your billboard and find an advertiser. This could be as simple as placing your contact information on the billboard.

Three mobile homes in a row with a palm tree in front.

Image source: Getty Images.

Pitches for mobile homes

When you think of passive real estate investing, where you collect rent for the space people live in, you probably think of single family homes or apartment buildings. But with an average RV park, you are simply renting out the lots where your residents own RVs are parked. When you rent out a home that you own, the maintenance and repair work involved means you need a property manager if you want a truly passive investment.

But with an RV park, your only worries are maintaining the road within the park and all outdoor public areas, and collecting rent. Residents are even responsible for maintaining their own yards. And with housing affordability becoming an increasingly pressing concern, now could be a good time to invest here.

Should you be considering an unconventional real estate investment?

While these three methods of generating passive income from real estate are all unconventional, it’s important to note that none of them are new or untried. They have all been generating passive income for investors for many years. They just don’t generate the attention that the more traditional avenues of real estate investment, such as renting homes or leasing commercial buildings, do.

If any of these methods of generating passive income have piqued your interest, they’re worth exploring further and could be a great way to diversify your portfolio.

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