It doesn’t really matter what kind of investing you are into, it’s almost always a smart idea to have multiple streams of income in order to maximize your profits while spreading your risks. Even within the confines of real estate investing there are different types of investments that can help you spread your risks when markets face turbulent times and this strategy becomes a good safety net for those who do not want to feel as though they are gambling away their investment dollars on a real estate market that may seem fickle on its best days.
You really have two courses of action when it comes to bringing in multiple streams of income when building your financial portfolio. The first is to spread your real estate wealth and investments across several different types of real estate investments like multifamily, office, retail, and industrial. You have two options even with these. You can either choose to rent properties outright to families and businesses or you can offer a lease or rent to own option.
Other options for bringing in multiple streams of income through real estate is to have a few rental properties and couple those with a few flips in the works, perhaps have a commercial property or two, and a pre-construction deal in the pipeline. One thing is certain you should always be on the lookout for your next real estate investment if you really want to make good money in this business while having a little added security. Rentals are passive income for the most part, especially if you have a good property manager taking care of the details and the other investments are often icing on the cake.
If you want a truly diversified portfolio however, it is a good plan to include a few investments that aren’t related to real estate investing. While we at PRI firmly believe that real estate investing is the way to go for most people there is much money that can be made in other fields and it would be pointless to discuss multiple streams of income without mentioning a few that were unrelated to real estate investing. Retirement plans are a great option and you can now invest in a retirement plan on your own through self-directed IRAs even if you are self-employed. It is definitely worth considering other streams of income, even if it is income that you will need to wait a while to receive. Franchise businesses are often great money makers for those who need more immediate results from their investment efforts, and stocks and bonds are also great long term investment strategies.
Alternative Investments Can Also Be Your Safety Net
When looking into investing in your future, you may want to include alternative investments in your portfolio. If you started out investing in real estate you may just want to diversify and get multiple streams of income adding to your net worth.
Have you ever known anyone who collects stamps or coins? How about anyone who collects art or antiques? Baseball, football, or basketball cards? These are some forms of alternative investments.
You may have been told by your personal financial advisor that you should be more diversified. If your portfolio is a little one-sided you probably should listen to them. Heck, it couldn’t hurt. You may find you actually like going out and finding new treasures to add to your collection.
If your traditional investments are not bringing inadequate cash flow, you may be able to use your non-traditional investment assets as collateral for a loan from your friendly, neighborhood lending institution.
In this present economy, investing in stocks, bonds, and T-bills can be quite risky and you could stand to lose everything. If you are diversified then at least you have some net worth left when all is said and done.
The truth is that there are many things you can do to create even more streams of income to add to your real estate investments. From making money online through affiliate marketing, blogs, and direct sales you can also tackle brick and mortar businesses, though these tend to be just as time-consuming as real estate. The point is that you want to bring in money from different avenues and real estate investing is one of many different routes to explore when deciding on your investment future and establishing those multiple streams of income.