Passive Real Estate Investing
Passive real estate investing differs from active real estate investment in that it requires minimal involvement. This may be in the form of purchasing turnkey rental property and hiring a property management firm to oversee the details, or it could involve providing funds, or a portion of funds necessary for a property purchase. With the latter, you would earn a share of revenues from the income produced by said property. In return from providing finances for the property, you’ll earn a residual income, typically on a monthly, quarterly, or annual basis. All active involvement required is handled by someone else, which involves the maintenance and upkeep of the property as well as overseeing the needs of tenants, and so on. This ongoing passive income will continue until the property is sold, at which point, you’ll receive a percentage of that profit as well.
This opportunity is very attractive to individuals who want to invest in properties in various locations, are active military, or retired and want to continue earning an income.
Here Is A List Of Ways To Get Involved With Passive Real Estate Investing:
1.) Turnkey Rental Property Investment:
This is by far one of the most popular and successful forms of passive real estate investment. In this scenario, the investor either personally locates a property or hires a real estate firm to find a viable property in a quality neighborhood. Many turnkey investors opt to have a property management company oversee the details of the property and with the exception of that monthly percentage, the remaining income goes straight to your bank account as tenants build your equity on the property and help pay your mortgage loan. One major component in this setting is ensuring you have tenants that will respect and take care of the property, abide by the lease agreement and always pay on time. Otherwise, bad tenants could damage your property or refuse to pay, which could result in legal expenses to get rid of them.
2.) Crowdfunding:
This is an online opportunity that is designed to allow investors to engage in real estate investments for just $5000. Properties can be located in various parts of the country and involve anything from residential to commercial environments, while taking advantage of tax incentives and depreciation deductions.
3.) REITs Investments:
This option is ideal if you are striving to diversify your investment portfolio. REITs investments can be used in various settings including residential, office, retail, and healthcare, hotels, and even technological infrastructures.
REITs (Real Estate Investment Trusts) were implemented during the 1960s, by congress, as a way for individuals to purchase commercial shares that otherwise wouldn’t be financially feasible. Depending on your investment, you may own a very small portion or a large share of an apartment or office building. As a shareholder of a REITs property, you will receive dividends. When opting for this version of passive real estate investing, the lower the interest rate, the better off you’ll be.
This hands-off approach to getting involved in real estate is one of the safest and easiest options. A major component to wise real estate investments involves knowing the risks and opportunities involved based on location, whether you do the research yourself or hire a trusted advisor to do the legwork for you. Passive real estate investing has the potential increase your income with very little risk or loss.
Memphis Buy And Hold is specializing in locating, purchasing, renovating and managing single-family and multi-unit properties and possesses from 2007 up to the present of experience in real estate investing and property management in the Memphis and Nashville markets.
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