Passive Investing Real Estate

Real estate agent

Passive Investing in Real Estate

Passive investing in real estate is becoming a popular option for those looking to increase their wealth without the hassle of actively managing properties. Here we look at some of the key benefits of passive real estate investing and how to get started.

What Is Passive Real Estate Investing?

Passive real estate investing is when you invest money in a property either directly or indirectly. Directly, you could buy a house or other real estate and rent it out or remodel and flip it; or you could invest in REITs (Real Estate Investment Trusts), funds, or syndication deals.

Benefits Of Passive Real Estate Investments

There are many benefits to passive real estate investing:

  • Easy To Get Started. It’s less intimidating to enter the real estate market passively than actively, and you require less capital to begin. With REITs and funds, you can start investing with little money.
  • Protection from Volatility. Real estate values are subject to the cyclical nature of the economy and can vary significantly from year to year. Investing in funds and REITs provides a layer of protection from volatile markets.
  • Diversification. Investing in funds gives you immediate diversification and access to a variety of different types of real estate investments.
  • Hands Off. With passive investing, you don’t have to worry about day-to-day management of properties. This makes it a great option for those who don’t have the time or expertise to actively manage a portfolio.

How To Get Started

Getting started with passive real estate investing is incredibly straightforward and there are many options available.

  • Investing in a REIT. A REIT is a fund that owns and operates income-generating real estate, and is a great way to diversify your portfolio. REITs are traded on the stock market and can be bought and sold just like stocks.
  • Investing in a Fund. Funds are collections of individual investments, often comprising commercial real estate, residential real estate, or both. They are managed by professional fund managers and can give you exposure to a variety of different markets.
  • Syndication Deals. Syndication deals typically involve a group of investors pooling their resources to invest in one property or a portfolio of properties. This is a great option if you have the capital but lack the knowledge or experience to effectively manage the investments.

Passive real estate investing is becoming an increasingly popular option, and if done correctly can be extremely lucrative. However, as with any investment, it’s important to do your research and understand all of the associated risks.