The Perfect Investment for Passive Income

One of the holy grails of investing is earning passive income every month. For investors on a quest for passive income, there are numerous types of investment funds to choose from. These funds can have different asset classes, but all provide investors with a steady monthly income, perfect for predicting cash flow whether you’re looking to increase your streams of income, create income stability, diversify your income, or are heading into retirement.

While passive monthly income is ideal, these funds come with different risk levels, so it’s essential to carefully select the right fund for your goals. In this article, we’ll identify some of the best monthly income funds, how they work, and which of them could be suitable for your portfolio.

What Is A Monthly Income Fund?

For investors seeking returns on a regular basis that would rather avoid long repayment schedules, or tying up their capital for 5-10 years, income funds are a great choice. Monthly income funds can include private funds, mutual funds, or exchange-traded funds (ETFs), each structured to deliver monthly passive income instead of appreciation on paper. Income funds can also hold different investment instruments, such as government and municipal bonds, along with corporate bonds, preferred stock, and dividend-paying stocks.

What Types Of Funds Pay Monthly Income?

Typically, investors put their money into investment funds that deliver a single large return that’s paid at the close of the fund, often with 5, 7, or even 10-year maturities. These funds are structured to minimize taxation of investment gains. On the other hand, monthly income funds are structured to provide passive income on a regular basis.

Many different types of investment funds can pay monthly income. Some hold a broad range of asset classes, while others focus on specific types of investment instruments like government bonds or common stock. How the fund is structured is really what dictates whether or not you’ll get monthly income distributions. Most income funds produce passive income at least quarterly, but many offer monthly returns instead of paying lump-sum capital gains or appreciation on paper.

How Risky Are Monthly Income Funds?

The monthly income funds with the lowest risk can have share prices that aren’t fixed but instead rise and fall with interest rates. Usually, bonds included in these funds are investment-grade and very safe. If there are other types of securities in the portfolio, they’re chosen for their low-risk, like blue-chip stocks that have been paying dividends for decades.

High-risk funds are geared toward delivering the maximum passive income possible to investors, like high-yield corporate bond funds and bank loan funds backed by adjustable-rate loans.

Be sure to check into the types of investments held by the monthly income fund you’re considering. High yields may look attractive but might not be worth the risk. There are plenty of monthly income funds that are safer choices.

Who Are Monthly Income Funds Good For?

Monthly income funds are attractive to many beginner investors because they make it simple for them to focus on specific asset classes. These funds can make it easier to diversify your portfolio by selecting a variety of funds with specific risk profiles for more stable, strong returns every month.

Perhaps one of the best scenarios for investing in monthly income funds is when someone takes early retirement and needs to supplement their income before their full benefits kick in.

Monthly Income Funds Backed By Real Estate

Investors seeking the most stable and secure types of monthly income funds often turn to real estate-backed funds. Not only can these funds offer high levels of security, but they can also deliver very attractive yields that translate to generating more income each month from the same capital. So what are some of the different types of real estate owned by these monthly income funds?

Multifamily Real Estate Funds

Multifamily properties include apartment complexes with multiple buildings and often have hundreds of tenants. This type of real estate delivers consistent returns and stability by balancing risk across many different tenants.

Retail Real Estate Funds

Retail property has the potential to pay premium and consistent returns for commercial real estate income fund portfolios. The best funds will focus on buying properties that have tenants in high-growth, stable industries like healthcare, grocery, and specialty stores. 

Industrial & Warehouse Real Estate Funds

With e-commerce order volume going through the roof since 2020, real estate investments in the industrial and warehouse sector have performed incredibly well. This type of space is still in short supply with no signs of meeting demand anytime soon, making them excellent for income funds.

Office Space Real Estate Funds

Office buildings are another secure source of long-term monthly passive income. When managed properly by experts in the segment, office buildings can provide consistently high-quality returns for monthly income fund investors.

Residential Real Estate Funds

Some monthly income real estate funds still focus on single-family residential homes, and often, they do so by acquiring entire neighborhoods of single-family homes to rent out in high-demand markets. There is more risk involved with these properties because only one tenant per property is paying rent, unlike an apartment building with dozens or even hundreds of tenants supplying revenue each month. 

Real Estate Development Funds

The highest-risk monthly real estate income funds are those that buy unimproved land to develop it into new real estate concepts. These are known as real estate development funds, and as you may imagine, they’re also the most complex to analyze. When it comes to real estate development, numerous issues could come up during the process. Because of this, development funds are usually only open to expert-level accredited investors.

Earn Monthly Income With A Real Estate Fund

When you seek monthly passive income while keeping your risks to a minimum, Saint Investment has a real estate fund that has the best of both worlds. Our team of real estate experts analyzes every asset that goes into our income funds. Aside from leveraging our real estate investment expertise, our monthly income funds give you detailed reporting and transparency, empowering you to earn real estate income without the hassles of direct property management. Call (323) 483-0291 today to learn more!