The majority of the millionaires will agree that they made their wealth from investing in real estate. Many of the busy professionals aren’t aspiring to be multi-million-dollar tycoons; however, many crave financial freedom, flexibility, and wealth generation. Although the path to generating oodles of money has broadened over the century, real estate investing is still a great avenue that offers financial freedom and wealth creation.
However, the concerns related to managing the tenants and property maintenance may have put off many of the aspiring real estate investors. Most people aren’t aware of the ways to invest in real estate without facing the hassle of becoming a landlord, flipper, or wholesaler. Here are three ways for busy professionals to earn passive income by investing in real estate:
1. REIT investments:
Real Estate Investment Trusts (REITs) publicly trade on the stock exchange and are one of the easiest ways to invest in real estate. Interested investors can purchase shares of large firms that build and develop their own properties. REITs are easy to find, have low minimums, and are relatively liquid investments. REITs invest in multiple properties; therefore, you won’t be able to review specific properties. However, you are investing in more of an index-fund across commercial real estate sectors.
2. Being the bank:
As an individual, you can lend private loans to real estate investors and hold promissory notes to generate passive returns. These loans are generally backed by real estate to provide assurance in case of default. Also, you can invest in existing long-term mortgages. Such type of investment is also known as real estate investing without property management. Investors buy notes, and borrowers simply make their monthly payments directly to the investor, instead of the bank.
With the help of a joint venture or real estate syndication, you can partner with other investors. Here, you will pool money together between active and passive investors to purchase commercial property. For example, instead of ten people purchasing ten separate properties worth $1,00,000 each, they can pool their money and buy a $1 million property.
These syndications have two groups – active and passive investors. Active investors are commonly known as general partners, and they handle all aspects of buying and managing the property. Passive investors, also known as limited
partners, invest equity and earn a return on their capital. Unlike REITs, investors have the ability to review specific deals before investing.
These three options are great for busy professionals to generate passive income through commercial real estate investment. If you do not want to manage your properties actively, these passive investing strategies are perfect for you. For more information, you can always consult with us at Perfect Real Estate Investment and get the best deals to invest in real estate, thanks to our property investment professionals.