The cost of living is only increasing, while the tariff war and job losses are making it difficult to make ends meet. A single source of income is no longer enough. You have to look for alternatives, and one method is to rent a room in your apartment through Airbnb. Even though an Airbnb is only for a few days, if you are not comfortable living with strangers, that option is out. What if you could get an Airbnb-kind of quick passive income without an Airbnb?
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The hands-off way to make passive income
A better option to support your expenses is to invest some amount in REITs and mortgage lenders. This way, you can diversify your income, maintain the privacy of your house, and also earn some extra money.
Passive income from rent in US dollars
Slate Grocery REIT (TSX: SGR.UN) has 116 properties across 23 states of the United States of America. Its tenant base largely comprises grocers and grocery-anchored stores. The REIT earns rent in US dollars and pays Canadian investors in Canadian dollars. This gives you exposure to currency fluctuations. The REIT’s revenue surged 1.1% year-over-year, but net income fell 7%. Its dividend payout ratio increased to 81.6% of its funds from operations in the second quarter from 74.2% a year ago. The weighted average interest rate also increased to 4.8% from the same period a year ago.
While the REIT’s earnings face some pressure, it can continue paying dividends for the long term. The REIT has been paying a stable dividend in US dollars, but Canadians saw a change due to foreign exchange conversion.
The attractive thing about Slate Grocery REIT is its 8.4% dividend yield, which is more than double the interest on term deposits.
Passive income from mortgage interest
Rental income is a good source, but you can diversify passive income avenues into interest income from construction loans and mortgages. MCAN Mortgage (TSX: MKP) has $6.7 billion in assets under management, which it gives to companies for construction projects. Many a time, these projects face delays for multiple reasons, and construction costs increase, leading to loan impairment.
MCAN has a history of paying regular dividends for 32 years and has even grown them in some years. The lender also offers term deposits and pays interest. It funds its loans through securitization and term deposits from customers.
The falling interest rates have reduced interest income but increased mortgage demand. The lender could continue paying quarterly dividends for years to come as house-buying activity improves after a dip.
MCAN has a dividend yield of 7.3%, which compensates for the credit risk.
Final thoughts
These high-yield passive income sources can start paying right from the first $100 of investment. You can get $8 annually by investing $100. The dividend comes in handy when you need immediate income, just like Airbnb-ing a room in your apartment.
