Passive Real Estate Investing

Having multiple income streams is one sure way to build wealth. There are so many industries that exist within which you can invest in and make profit. One of the top industries that has become home to many investors is the real estate industry. Because of its high tendency to yield massive returns when done correctly, the real estate sector has become highly sought after. 

So many platforms exist within the real estate sector. However, as an investor you can choose to either be an active or a passive real estate investor. In this article we will be focusing on passive real estate investing.

See also Beginner Tips For Real Estate Investors

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What is Passive Real Estate Investing?

Passive real estate investing is a form of investment in which you do not have direct responsibility over. What this means is that, you do not directly manage whatever real estate venture you have engaged in.

This kind of investment offers you a long-term growth opportunity. It could also serve as an ongoing income stream. It also requires that you properly investigate the kind of investment platform you want to engage in so you can be sure of reaping the benefits thereafter. 

How Do You Become a Passive Real Estate Investor? 

Passive real estate investment can be done in different ways. Some of which are; 

Real Estate Investment Trusts (REITs) 

These are companies that use joint resources of real estate investors to invest in large real estate deals.  REITs invest in different real estate ventures such as single-family homes, apartments, retail locations, hotels, offices, warehouses, or shopping malls. They invest in these properties to generate profit from rental income and property appreciation. This is a good investment opportunity for investors who want to produce cash flow. 

Crowdfunding

In this type of passive real estate investment, different investors pool their resources together to make one single investment. This comes with the benefit of being able to invest in certain real estate ventures that you could not single handedly do. Usually, there are some criteria you must meet before you qualify to be a co-investor. Also, the Investment has its strategy, expected returns and timeline. Investors have to be prepared for long term commitment when it comes to crowdfunding. 

Stocks

You can purchase stocks in real estate businesses or companies such as construction companies, property development companies, brokers and so on. 

Read also How to Make Good Real Estate Investment Decisions

Reasons to Consider Passive Real Estate Investing

Some reasons to consider passive real estate investing include:

Opportunity for Indirect Investing

Although many people are interested in entering the real estate sector, they do not want to be active players in it. Passive real estate investment gives you the opportunity of investing without having to deal directly with the issues that come with real estate investment such as property management, rentals and so on. 

Avoid the Issue of Finance Sourcing

With passive real estate investing, you do not have to deal with the hassles of sourcing for financing from the banks or any other lending institutions. The investment company you’re working with would take care of that as they are professionals and most likely already have banks they work with. 

Leverage on Professional Expertise

You also get to leverage on the professional expertise of others. Since you are not directly or actively engaged in the investment, those who are more knowledgeable about the real estate market would manage the Investment. You can get your money’s worth even without knowing too much about real estate investments. 

Another Passive Income Stream

Passive real estate investment gives you the opportunity of earning money while you sleep. Once the Investment becomes active, you can start getting your returns after a given period of time even while you’re keeping your regular job or business. 

Risks of Passive Real Estate Investing

Just like every other investment, there are risks involved in passive real estate investment. The investment value can go down or a general downturn in the real estate market could lead to decrease in investment value. Risks could also arise from the person managing the investment. 

As such, it is important to conduct thorough research before carrying out any investment. Although risks are inevitable, you have to take calculated ones. 

Find out How To Avoid Common Mistakes Real Estate Investors Make

 

Passive real estate investment provides an equal playing ground for individuals who do not want to be heavily involved in real estate Investments. It could be a valuable source of income for investors who do their due diligence in the entire process. 

MKH offers you investment opportunities that you can tap into. We can serve as your gateway into the real estate sector with a high guarantee on good investment returns. We also have properties that are strategically positioned to give you the profit you desire when you invest. You can contact us here for more information. 

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