Main Content

What Is Passive Real Estate Investing?

What Is Passive Real Estate InvestingWhen you are looking to purchase a home, you might be looking for a place for you and your family to live. It might surprise you to learn that not everyone who is looking for a house is necessarily in search of a place to live.

Real estate is also a great way for someone to grow wealth. Furthermore, real estate is actually one of the most common ways that people become millionaires.

Some of the active ways that people invest in real estate include flipping houses and renting out property. This can be time-consuming and isn’t right for everyone.

If you are looking for a way to make money in real estate without flipping houses or looking for tenants, passive real estate investing might be the answer.

An Overview Of Passive Real Estate Investing

While passive is the opposite of active in this scenario, passive real estate investing does not mean that you won’t have to do anything. There is still work to be done.

When you invest in a passive manner, this means that you aren’t playing an active role in the growth of the asset, which is property in this example.

One example of passive investing is the stock market. You need to make sure that you do your homework before you start throwing money at the real estate market.

There is a serious time commitment that comes with passive real estate investing. You will also need to monitor the property values to make sure your investment is generating a solid return.

Ways To Get Involved In Passive Real Estate Investing

There are a few common ways that you can start investing in real estate, in a passive manner.

First, one of the most common ways is through the stock market. There are businesses that make their money by investing in the real estate market for you. You can buy shares of these companies who then invest your money in real estate.

Alternatively, you can also set up a partnership with an active investor. You might own the properties and then pay the active investor to rent them out to someone else.

Finally, there is also real estate crowdfunding that has come on the scene. Those looking to invest smaller amounts of money might be interested in this method which pools smaller investments together to invest in much larger real estate projects.

It’s important to talk with your trusted local real estate and mortgage professionals to get the best information for your personal situation.