What Are Income-Generating Real Estate Investments?

Real estate is considered among the best choices for long-term investments with good returns. Most people buy real estate either for personal use or to sell later for a profit. But, did you know you can also buy and use real estate as an income-generating asset? We’ll discuss more about income-generating real estate in this article as well as learn about a new way of investing in real estate, called real estate NFTs.

As the term ‘income-generating assets’ has become increasingly common and popular among millennials lately, young generations are constantly seeking to invest in assets that can produce regular income for them. Examples of such assets include dividend-paying stocks and rental properties.

What is income-generating real estate and why should you invest?

As the name suggests, income-generating real estate is a type of property that generates regular income from you. For example a rental house or office. From these properties, you can generate a regular income through rent.

There’s a vast range of properties that can be used to generate rental income. Some examples include apartments, homesteads, bread and breakfasts, commercial real estate, single-family homes, etc. The key is to use the property to generate money for you rather than personally occupying it.

In terms of rental revenue and frequency, there can be different types of income-making properties, such as daily/weekly rental motels, monthly rental housing or rooms, annual rental agreements, short-term vacation rentals, commercial rentals, etc.

Why invest in income real estate

Side income: When you purchase an income property, you acquire an asset that can pay you a regular side income for as long as you own it.

Portfolio Diversification: Acquiring rental properties is a great way to diversify your portfolio beyond traditional investments such as stocks.

Security: Renting your real estate asset to a credible tenant provides you with the assurance of security.

Appreciation: Rental properties’ value appreciates over time like any other real estate.

Tax benefits: Owning and renting your property allows you to benefit from some tax reliefs on maintenance costs and value depreciation.

Real Estate NFTs–An alternative way to invest in income-generating properties

NFTs are the newest way to invest in rent-paying real estate. Not many people know about this because NFTs are a new kid in town. But, they are great once you get to understand them.

Real Estate NFTs are tokenized properties, i.e. properties that have been digitized to increase their liquidity. Tokenization of real estate on the blockchain allows for worldwide accessibility, high security and transparency. The integration of NFTs into real estate enables the trading of properties as fractionalized assets, allowing investors to buy fractional properties.

There are many benefits of purchasing Real Estate NFTs over traditional real estate. They are easily accessible, allow you to buy fractional properties, have low minimum investment criteria, and are very secure.

To know how income-generating real estate NFTs work, we take the example of BitStake–a real estate NFT marketplace providing access to premium tokenized real estate around the world.

All the properties listed on the BitStake platform have been tokenized and are sold through NFTs. As of now, the website has premium apartment properties across Melbourne Australia. The best part is that one can invest for as low as A$100.

For example, this luxurious apartment located in a multistory apartment building, called Aspire Melbourne, has been fractionalized into 5930 NFTs, each with a value of A$100. You can buy a minimum of 1 NFT for A$100 and be eligible to receive a portion of the apartment’s rental income. It’s as simple as that.

How to earn income from real estate NFTs

According to the listing, the Aspire Melbourne apartment has an annual percentage yield (APY) of 11-12%. This yield is generated through rental income. The income generated from the property is divided among all its owners based on their stake. For instance, if you purchase 1 NFT out of 5930 NFTs, you’ll own a 1/5930 fraction of this property and will receive this much portion of the annual rental yield.

The key to earning more from your real estate investments is to find and invest in high-yield properties. Real Estate NFTs are right now one of the best types of income-generating properties in terms of accessibility and convenience. Check out the complete property listing and invest to start earning a high rental income.