How to Earn a Passive Income in Minneapolis

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How Rental Property Generates Passive Income

Have you ever wanted to have the ability to earn money while you sleep? Few of us ever have the opportunity to do such a thing. We have to go to work to earn money, and that's just how things go.

However, there are a select few that do have the opportunity to make an income without even working for it. These passive income earners can make money as they play golf, go on vacation, or do just about anything else. How can someone get in on earning a passive income stream?

In our experience, one of the best ways to earn a passive income is by investing in rental real estate. Here's the greatest part: you don't even have to be rich to get started.

An Owner-Occupied Duplex: The Easiest Way to Start Earning Passive Income

If you're serious about finding ways to earn a passive income stream that leads you towards financial freedom, then we think that you should consider purchasing an owner-occupied duplex. Duplex owners who owner-occupy are reducing their share of a mortgage payment by generating a passive income stream from the tenant who rents out the other unit of their property. The amount of income that's generated by a tenant in a duplex is often enough to cover a large share of an owner's mortgage payment--sometimes even the whole thing!

The amount of income that's generated by a tenant in a duplex is often enough to cover a large share of an owner's mortgage payment--sometimes even the whole thing!

Think of the financial freedom you'd experience by having your mortgage or rent payment halved or even eliminated. What would you do? Would you give away a larger portion of your income, take a vacation, pay off student loans?This kind of thinking doesn't have to be put in the category of "silly dreams". In fact, this can become a reality by carefully planning out a duplex investment.

how to earn a passive income in minneapolis

Buying a Duplex

Contrary to popular belief, buying a duplex doesn't have to be something that's just for the rich. In fact, if you can qualify for a single family house, you're likely to be able to qualify for a duplex. In many ways, buying a duplex is very similar to buying a single family house. For first-time homebuyers, it's even possible to use an FHA loan to put as little as 3.5% down on a duplex. Otherwise, another option that may be available is a conventional loan with a down payment of around 5%.

In Minnesota, there are even down payment assistance programs available for some buyers that allow you to take out an additional loan to help you with the down payment that would otherwise require significant amounts of cash at the time of closing.

Another great opportunity offered by duplexes is the ability to use an anticipated rental payment as a way to help qualify. Since your property is expected to generate passive income, most mortgage lenders are willing to consider this as part of your income when you're going through the qualifying process. While they won't accept the whole anticipated rent payment as income, they will typically take approximately 70 - 75% of it. This means, of course, that many buyers are able to qualify for more with a duplex.

Conclusion

If you're interested in hearing more about how a duplex can help you to generate a passive income stream, please feel free to get in contact with us today. We'd love to talk more about the options that are available to you as a first-time or continuing investor.