Passive Income vs. Active Income

For the untrained, there are two main types of income - active and passive.

Active income is the money you earn in return for performing a service such as receiving a salary for employment.

On the other hand, a passive income is money you earn from investments or jobs completed in the past, which requires minimal or even zero involvement to generate continuous income.

This is a basic financial concept, however, many Australians rely on active income.

Generate ‘Passive Income’ for Your Family Through Property

How to Generate Passive Income

Renting a property is one way to generate passive income in Australia.

You can buy residential or commercial property and rent them out. This is one way to create a steady flow of passive income. 

Some property investors also develop or renovate existing properties so they can sell them off generating a passive income.

Passive Income Investments: Investment Property

Creating passive income streams will not only save you from unexpected events (sickness, disability, or early demise). It helps you build your wealth.

You may think that passive income is about generating money from nothing. However, it still involves work, normally in the early stages.

You can earn passive income from two main sources: Investment properties that pay you rental income, or Shares in which you earn dividends or distributions for your ownership of those shares.

Start Building Your Rental Property Business

Renting a property is one way to generate passive income in Australia. 

You can buy residential units or commercial spaces and rent them out so you can create a steady flow of income. 

Some property investors also develop properties to build equity so they can make money from reselling units. 

Frequently Asked Questions

What is passive income in real estate?

Passive income in real estate involves earning properties like housing units or commercial spaces and renting them out. 

You can earn passive income from the weekly or monthly rent, however, you can also choose to develop the property to build your equity. 

How much do you need to live off passive income?

There is no fixed amount that you can set as a benchmark for your passive income goal because it depends on your circumstances as well as risk profile. 

You need to consider your age, financial goals, financial status, and other factors to crunch your target. 

Normally, getting to the point where you can live off passive income takes time, effort, and planning. 

It is best to work with a licenced wealth advisor to help you develop a strategy in creating your ideal passive income stream.

Is real estate a good passive income?

Real estate is normally a good source of passive income. 

As long as you set up the rental business properly (good location, decent tenants, good upkeep), you can enjoy a steady stream of passive income. 

However, there are still risks associated with real estate rentals such as high vacancy rates, taxes, upkeep costs, or loan rates.

How can I make a $1000 passive income?

One way to create a $1000 passive income is through real estate. 

You can buy an apartment and rent it out so you can charge $1000 per month. However, you must make sure that the property is properly set up as a rental business and the amount you charge is fair and reasonable. 

Talk to a Property Investment Advisor Today 

TENX Wealth has a team of property investment advisors who can help you set up your rental business in Australia.