Passive Real Estate Investing

Whether you want to add real estate investments to your portfolio or simply increase your passive income, there are plenty of options. However, there are some key questions you need to ask yourself before jumping into Passive Real Estate Investing For instance, how hands-on or hands-off do you want your investment to be? How much time do you want to devote to vetting and managing tenants, and what kind of return on your investment do you expect?

If you want to create a passive income stream, consider leasing out single-family homes or condos. In this type of investment, you can outsource tenant screening and property management to a third party company. If you choose to do this, be sure to screen tenants carefully, as a bad tenant can cause serious damage to your property and a long, expensive eviction process.

Another way to create a passive rental investment is to use online real estate platforms to invest in out-of-state properties. This strategy has become a favorite of many seasoned investors because it allows complete ownership of remote property with minimal effort required on your end. However, you must be comfortable communicating with maintenance and property managers on a regular basis online.

Finally, you can also turn real estate into a passive investment by investing in REITs or Real Estate Mutual Funds. These professionally-managed funds are typically traded on the public markets and invest in a range of properties through a broad spectrum of investment strategies. While they may not be as passive as direct property ownership, these types of investments can generate passive returns through rents and property appreciation.

If you have the capital to purchase a rental property, you can also take a more hands-on approach to real estate investing by renting it directly to tenants. This can be more profitable than a REIT or RMF because you will receive higher rents and have greater control over your tenants. However, this can be more complicated and require extensive due diligence to find the right tenants and manage repairs.

Another option to become a passive investor in real estate is to use crowdfunding platforms that connect non-accredited and accredited investors with deal sponsors looking to raise money for income-generating commercial and residential real estate projects. Crowdfunding is more passive than direct property ownership and can be a great way to diversify your real estate portfolio at scale. However, it requires a higher level of research and due diligence to ensure that the projects you invest in are vetted by experienced deal sponsors. EquityMultiple is a great example of a real estate crowdfunding platform that provides passive rental investments for accredited and non-accredited investors. Investing minimums start at just $10K.

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