Top 10 Income Producing Assets
We have a personal mission at TermLife2Go to improve the life of every one of our visitors that happen to find themselves on our site. Our primary goal is to help nurture your money IQ and help you achieve financial freedom. In the following article that lists the best income generating assets we currently follow we have done our best to list income producing assets that create an immediate stream of income, rather than assets whose primary benefit is appreciation. If you have additional ideas, please leave us a comment below.
Appreciation vs Income
There are different ways an asset can create value. One way is through asset appreciation. Appreciation is the growth in value of an asset over time. As asset can increase in value due to various factors, including a higher demand due to scarcity or a rising price due to inflation.
The other side of the asset coin is income. An asset can create a stream of income that helps supplement your existing income. The income that is generated can create additional opportunities to buy more income producing assets.
For example, the real estate market in certain metro areas creates both an appreciating asset and an income producing asset. Due to the high demand of housing and limited supply in certain geographic regions, home prices can increase substantially. In addition, inflation also contributes to rising home appreciation. The increase in the home price due to strong demand and inflation is the real estate’s appreciation.
In addition, your may also lease the real estate to a tenant. The rent you charge your tenant may create positive cash flow, which is another way of saying your property is an income producing asset.
Our goal in this article is to focus on the latter, income producing assets. All the assets may appreciate in value as well. But that is not a criteria we are using to determine what the best income producing assets are.
Residential Real Estate
Real estate is probably the favored choice among investors, producing value through both income and appreciation. Purchasing property with the sole purpose of renting it to a tenant allows you to receive a income stream for as long as you’re the owner. There are a many different ways to go about this. We will list a few recommendations here.
One fantastic way to start out in the world of real estate investing is to purchase a multi-family unit, preferably a duplex, triplex or fourplex. The strategy here is to buy a real estate property that you can live in and rent out the additional units. If you are existing or retired military, you can qualify for 0% down VA loan. First time home buyers may even qualify for a FHA loan which requires 3.5% down. With a low down payment, you are using other people’s money (i.e. the banks) to finance your investment.
Single-family units provide another great revenue stream. People like to rent single-family homes because they “feel” at home. Living in an apartment does not create the same sense of ownership. So, a single-family home is a great income producing investment to make because you will often have renters who take care of your property and want to lease your property for a longer period of time, which cuts down on your expenses and provides a higher rate of return.
Turnkey Real Estate Investing
Turnkey real estate can be a top income producing asset that requires very little work. You are going to need to purchase the property with a 20% down payment and finance the remaining 80%. Once again, use the leverage of other people’s money, rather than increase your own personal risk. If the investment does not make sense with only 20% down, go find another opportunity. Don’t try to “buy” cash flow through a large down payment or all cash offer. You are tying up your money and killing its potential velocity.
So back to turnkey real estate investing. If you don’t have the resources, including time, to buy, renovate, and lease a property, turnkey investing provides a great opportunity to get your money working for you right away. There are a lot of companies out there that offer turnkey investing in real estate. Look for reviews and testimonials to find the best options.
The way you make money with turnkey real estate investing is you choose a market. Most companies will do a thorough market analysis for you. Then you research the offers in that target market. The turnkey real estate company has already bought a property, rehabilitated it, put a tenant in it, and has a property manager.
Your job is to come up with the resources to buy the turnkey investment. Once you purchase the property, you start to collect rent and you benefit from any appreciation in the property. You can continue to use their property management services, or find your own property manager. It is really a great income generating asset opportunity.
If you would rather avoid the hassle of tenants and worrying about how the local real estate market and economy is doing, you can find an income generating asset through investing in income producing farms.There are many options available to the astute investor who knows how to do a little research and due diligence. We have provided three turnkey farm options to get your wheels turning.
Through an intermediary, you can buy land that is used for farming coffee beans. The company provides everything you need to grow, cultivate and harvest the coffee beans. Once the coffee is harvested, it is then sold. You make income off your property’s annual coffee bean harvest.
We list cacao farms because we have noticed more and more healthy, organic cacao options at our grocer. These specialized products came from somewhere so we did a little search and found some opportunities to buy this income producing asset. In similar fashion to the coffee farms option above, you buy the turnkey plot of land that produces cacao beans. The beans are harvested and you make income from the sale. And every year you can do it again.
Peer-to-peer lending provides one of the best income producing assets. With no real effort on your part required, you lend money to other people and you receive interest back over time. Typically, your principle will be locked up for a period of time, and once the loan has been repaid you are free to take your money and re-invest it or simply move along.
There are plenty of online peer-to-peer opportunities, such as Lending Club or Prosper. Our advice would be to stay diversified and spread your risk over many different opportunities, rather than just one higher yield option. The higher investment returns have a higher default rate. That is because the higher investment returns represent borrowers who have poorer credit history records. So be safe out there and remember Warren Buffets two rules of investing, (1) never lose money and (2) never forget rule #1.
Building a Website
A website can be a very good income generating asset and it looks as though it’s going to stay this way for many years to come. As you create the website, build up a readership, you can then earn money through advertising, affiliate marketing, and several other methods. You can also skip the tough process of starting a site from scratch and instead buy an existing website from the different sites that offer a platform connecting buyers and sellers of websites.
Cash Value Life Insurance
There are many advantages of cash value life insurance. One income producing asset in particular works well because of the guarantees it offers.
Dividend paying whole life insurance is a non-correlated asset that offers three distinct guarantees, which are a guaranteed death benefit, guaranteed level premium and guaranteed cash value growth. And although not guaranteed, the best dividend paying whole life insurance companies have paid dividends for over 100 years straight.
But don’t stop there. You can use your cash value life insurance to create multiple income streams. Check out our infinite banking review for more.
Buying dividend stocks is a good entry into income producing assets that also have the ability to appreciate. Ideally, as with any stock, you want to buy low and sell high. Keep an eye on blue chip stocks that have had a rough go of it over the last few years. REITs are another option to look at for potential income producing opportunities.
Interest Paying Bonds
Bonds are sort of like peer-to-peer lending, except you are not a peer. You buy a bond, which is basically an IOU. The bond is backed by the government or a business who wants to raise extra capital. You buy a bond for a particular timeline, a rate of return, and a specified face amount. Generally, you get interest from your bond paid to you twice a year. After the timelines has passed, your bond has matured, and you can reclaim your principle.
The Uber/Carvertise Combo
Uber offers the ‘Going my Way’ feature which turns the drive into a passive income, or at least income with minimal effort. Going My Way allows you to pick passengers up along the way as long as they have the same destination as you. Now add in a few advertisements on your vehicle from Carvertise to make some additional income, and you have a money making machine, literally.
Depending on where you are in the country, there will be a service who installs the ATM and then looks after it on your behalf. Where does the money come in? Well, every withdrawal will have a small charge and you take this as commission, after giving a cut to the service company and the store the ATM is located in. Some popular places to park your ATM machine are in a bar, a restaurant or in a marijuana dispensary. Just search out turnkey ATM for more information on this income producing asset opportunity.
What Other Assets can Produce Income?
We have one more idea for you down below. This is an idea that came about living next to the beach in a tourist town. This idea can (and has) work well. The key is to think about what assets you can buy that you can turn into continual income.
Surfing Rentals and Lessons
Your surfboards can be income generating assets. If you are buying them for the business exclusively you may even be able to write them off as a business expense. Once you have a healthy quiver of boards available you can either rent our the surfboards or provide a package deal of the board and an hour lesson. And if you can find a competent surfer to manage your new business, you can focus your attention on marketing for new clients.
Hopefully this list of the best income producing assets we could come up with helps to gear your investor and entrepreneur juices flowing. Maybe you pursue on of the ideas listed here or they have helped you come up with another idea. Either way, our goal was to help you get one step closer to true financial independence. If we helped you do that in any way, please drop us a note below.