4 Ways To Invest In Real Estate Without Buying Properties

Real estate is an intriguing investment option that many people consider when planning for their financial futures. Approximately 97% of investors plan to increase the allocation of their capital to real estate within the next 18 months. However, buying and maintaining houses or becoming a landlord can be a turn off for some. Fortunately, there are ways for you to build residual income without dealing with tenants. Here are five ways to invest in real estate without buying actual properties.

Real Estate Exchange Traded Funds

These funds are a collection of bonds and stocks within a single fund. Exchange-traded funds have similarities to mutual and index funds such as low costs and broad diversification. You can invest in real estate investment trusts by buying shares as you would with a traditional stock.

You can also purchase shares in a private REIT. The risk-reward profile of private REITs are a little different. But one of the key advantages is that they generally aren’t susceptible to the same degrees of volatility as the stock market is.

Real Estate Notes

Real estate notes allow you to invest at lower costs because you are essentially buying real estate debt through a bank. You will need to perform your due diligence in order to determine if these notes are truly worth buying. Some are able to find great opportunities. If the homes cannot be sold or renovate, you may have trouble getting your money back.

Hard Money Loans

If you have plenty of cash to spare to invest in real estate, you can consider becoming a lender to other real estate investors with hard money loans. You provide the loan directly to the investor and the investor uses it to create a return on your investment. You benefit with investing in real estate this way by not having to participate in the buying and selling process and can free up your time for other income-producing activities.

Online Real Estate Investing

You can use an app for investing in real estate or an online website to purchase a residential or commercial property for sale with a company. There are many real estate investment apps available to choose from. This allows you to receive cash flow distributions without having to get your hands dirty. There is no requirement to be an accredited investor to be able to open an account with one of these online real estate companies.

If you are looking to invest in real estate, these above five ways can help you build residual income without extensive home maintenance costs and tenant relationships. You will need to carefully research which ones are best suited for your financial needs before making an investment. You’ll get all the benefits of owning real estate without all the hassles that sometimes come with it.

3 Ways To Create Passive Income Through Real Estate Investing

Real estate investing can be an excellent way to create passive income for investors.
An average of 15% of an ultra-wealthy person’s portfolio consists of real estate investments, according to a 2017 study from UBS and Campden Wealth.
How can you use real estate to build a passive income stream for yourself?
Here are three ways to create passive income through residential and commercial real estate investments.

Investment Properties generate passive income

You can create passive income with investment properties by leasing or renting the property to others. Owning these types of investments can provide depreciation tax benefits and value appreciation in the long term. Commercial real estate investments can require a large amount of capital upfront and are often labor-intensive. You will need to manage the property, but it is common for novice investors to hire property managers rather than doing it themselves. You can find these properties by downloading a top investing app on your smartphone for free online.

Private Equity Funds

This type of investment is a collective fund consisting of cash investments made by several investors. They provide extensive diversification with different investment types. There is typically a 2% investment management fee on an annual basis and a performance fee that’s usually around 20% of the profits earned. If you are lucky enough to find an investment that seemingly explodes overnight, you can see incredibly large returns on your investment.

Real Estate Investment Trusts

Real Estate Investments Trusts (REITs) distribute 90% of taxable income to shareholders every year. REITs are either publicly traded, publicly non-traded, or private non-traded. Publicly traded REITs are made available for the purchase of shares on an open stock exchange. Non-traded REITs are available through broker-dealers or directly from the REIT itself. Non-traded REITs can provide larger dividends but often have expensive upfront fees. If you want to learn more about what REITs are and how they work, check out our detailed breakdown.
These trusts can also save you money from having to manage tenants or hiring a property manager. They are also exempt from corporate taxes as long as they adhere to specific guidelines set forth by Congress. REIT dividends have the potential to increase over time, as the properties appreciate. You can find these funds by searching for apps for real estate investors on your smartphone.

Build your passive income stream

Investing through a real estate investment app can be an excellent way to build residual income. It’s wise to scrutinize each type of investment before making any decisions. Fully understand the risks before putting your money on the line. Diversify your assets. A well-balanced portfolio will help reduce your risks and produce stable streams of income for many years to come.

What Makes The Right Commercial Property Investment Company Exactly The Right One?

Rental properties are a fantastic investment opportunity, but if you’re new to the world of investing, navigating the process can be tricky. To help you avoid any potential mistakes, consider working with a commercial real estate advisor. How do you pick the best one? Here’s what you need to know to choose the right commercial property investment advisor for you.

What’s Their Experience?

When considering a commercial property investment company, you should look for one with an attractive portfolio and strong management team. You will want to know how many years of experience and the overall track record of the agents that work for the company. How much do they know about the current economic trends and other factors that can affect the real estate market? Ask detailed questions and request proof of credentials. Ask for references and follow through with previous clients.

What Are Your Real Estate Investment Goals?

You should have an idea of what your investment goals are before seeking out commercial real estate investment companies. What are you looking to achieve? Are you working towards building residual income?

Are you looking for tax benefits? The new tax laws that went into effect this past year provide investors with a 20% income deduction received through LLCs and other pass-through entities. Knowing what your goals are ahead of time will help you to determine which investment property best meets your needs.

Is Rental Property Management Available?

As a new commercial real estate investor, having rental property management available can be beneficial while you are learning the ropes. Investigate how the company has handled property management in the past. Do they have a big enough team to handle the responsibilities of multiple commercial properties? Do they have extensive experience with the types of properties you are most interested in? The more experience they have, the more likely that you will receive the return on investment you are looking for.

How Much Does The Investment Company Cost?

Commercial real estate investment companies charge a range of fees, depending on what properties they have and the size of their real estate team. According to SmartAsset, financial advisors typically charge a flat fee in the range of $1,500 to $2,500 for a one-time, financial plan creation. If you’d like the advisor to continue managing an ongoing portfolio, they’ll likely charge one or two percent.

How will these fees affect your investment returns? Shop around various companies and compare fees. However, be careful about selecting a company simply because their fees are the lowest. Without the proper experience, you can end up paying more than you bargained for.

Choosing the best commercial property investment company is critical for your success in real estate investment. Do your homework carefully and understand all the terms and conditions before signing any contracts. Your investment is an important decision for your financial future so be sure to choose wisely!

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