Real estate can be considered either a form of passive or active investing strategy, depending on how you go about doing it. There are several ways to invest in real estate. Opportunities like REITs make it easy for the average investor to get involved. There is no need to spend several thousand or hundreds of thousands of dollars on properties and actively trying to fix them up and sell them or rent them out. Not everyone can be a landlord.
Some investors get direct ownership of property as part of a group, with partners or friends who want to go into it together. Another option is to be limited partners in syndication. A syndication’s structure contains the primary sponsor who puts a deal together to purchase a potentially profitable property. The other investors become limited partners and buy a share of the deal.
Whether you are interested in direct ownership as a sole investor, a limited partner, or want to learn about other ways to invest in real estate, you should first think about the types of properties you are interested in. The real estate industry is vast and encompasses a wide variety of property types:
- Single-family homes
- Multi-family homes (duplex, triplex, or quad)
- Apartment complexes
- Farms / agricultural land
- Commercial real estate
- Office buildings
- Industrial use
- Storage facilities
- Short-term rentals
Commercial real estate goes across all sectors and industries, from medical buildings to entertainment venues.
Ways to Invest in Real Estate Through REITs
When evaluating ways to invest in real estate, look into REITs and individual stock options both. For those who don’t have much experience, REITs are usually the safest and most affordable option.
There are Public REITs that are similar to mutual funds. These are ideal for those who want to add real estate markets to their portfolio but want the investment to be passive. However, a potential downside to public real estate investment trusts is that they may correlate with the overall stock market and won’t always provide enough diversification.
Private REITs are not publicly traded, although they work with the same concept as their public counterparts. The investor purchases shares and can expect dividends. However, this option is only available to accredited investors.
Where can you learn more about ways to invest in real estate, and which opportunities might be best for you? The RealtyMogul Platform is an excellent place to look into, and 128,000+ investors have already joined. Members can invest in well-leased properties with exceptional management.