Investing in Real Estate – Active or Passive?

Many investors are because they do not have the time or inclination to become landlords and property managers, each of which is in actuality turned off by property. Property gets more of a business instead of an investment if the investor is a rehabber or wholesaler. Many successful real estate investors are now property operators in the real property industry. There are ways for investors to enjoy lots of the inflation and secure proof advantages.

Real Estate Business

Active participation In property investing has many benefits. Middlemen fees, charged by asset managers and syndicators, brokers, property managers could be removed leading to a greater rate of return. Further, you make all choices; for worse or better that the line responsibility is yours. Additionally, the active, direct investor can make the choice to sell whenever he wants out (assuming that a market exists for his property at a price sufficient to cover off all liens and encumbrances).

Passive investment in Property is the other side of this coin, offering benefits of its own. Real estate investment managers, who spent time managing, analyzing and investing property select property or mortgage assets. These professionals can negotiate costs that are lower than you would be able to. When a variety of investor’s cash is pooled, the investor can have a share of land of, safer, more rewarding, and bigger a greater investment class than the investor working with less capital.

Estate is Bought with a mortgage note for a large portion of the purchase price. The investor would probably need to guarantee the notice, placing his assets while the use of leverage has many benefits. As a investor, shares in a Real Estate Investment Trust is partner or owner would not have any liability exposure over the quantity of investment. The direct investor will be not able to diversify his portfolio of properties. With possession 4 or 2, 3 properties the investor’s funds wiped out by an isolated problem in one of his possessions or is easily damaged. The investor would have a share of a large portfolio of properties. With portfolios of 20 any one or two’s difficulties would not significantly hurt the performance of the portfolio.

Kinds of Passive Real Estate Investments


Real Estate Investment Trusts are companies that manage, own and operate income. They are organized so the income generated is taxed at the investor level. By law, REITs must pay at least 90 percent of the income to their shareholders as dividends. REITs are. There are about 180 REITs whose stocks are listed on ASE the NYSE or NASDAQ. REITS specialize by land type (apartments, office buildings, malls, warehouses, hotels, etc.) and by area. Dividend yields can be expected by investors in the 5-9% range, possession in high quality property that is real management, and an opportunity for long term capital appreciation.