Passive Investment Options

  1. CROWDFUNDING: Crowdfunding is a popular method of passive real estate investing, where smaller investors pool resources to make a single investment in various real estate projects. Before getting involved, it’s important to consider if you meet the platform’s criteria and evaluate the reputation of the crowdfunding platform. It’s essential to carefully evaluate the investment and its terms, considering factors such as the quality and experience of the sponsor, the value of the underlying property, and whether you prefer investing in equity or debt.
  2. REITS (REAL ESTATE INVESTMENT TRUSTS): REITs are companies that own, finance, or operate income-producing real estate, providing passive investors with stakes in substantial real estate deals without high barriers to entry. They are required to distribute at least 90% of their taxable income to shareholders each year in the form of dividends, making them attractive for income-seeking investors. REIT portfolios typically include investments in many different properties, providing diversification compared to crowdfunding investments, which are typically property or project-specific.
  3. REMOTE REAL ESTATE OWNERSHIP: Remote ownership allows investors to obtain complete ownership of remote property without actively managing it. This strategy, often done through online platforms, can provide higher returns than other forms of passive real estate investing if done properly. It also allows for diversification of property ownership across numerous locations, lessening the risk of a poorly performing market substantially hurting the investment portfolio. However, there are risks to consider, such as purchasing a home in a different location without visiting it in person and assessing tenant reliability.
  4. TRUST DEED INVESTMENTS: Trust Deed investments involve investing in a loan secured by a deed of trust recorded against a specific property. Investors typically receive a stated interest rate of return paid monthly and the return of the principal investment at maturity, acting as the lender to someone purchasing a property. This provides another option for passive real estate investing with regular income and a return of the principal investment at the end of the term.

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Shirin Rezania Ramos | 858.345.0685 | | Compass, DRE 0203379

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What is Passive Real Estate Investment Strategy?

Tue Apr 30 , 2024
Passive real estate investing offers a way to generate income without the need for significant active participation. Similar to index investing in the equity markets, passive real estate investment strategies […]

Shirin Rezania Ramos, Realtor®