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Investing in real estate can be a lucrative venture, but being a landlord comes with its own set of headaches. If you want to add real estate to your portfolio without the hassle of managing rentals, consider these hands-off investment strategies.
Seven Real Estate Investment Strategies for Passive Income
Public REITs are a popular choice, offering liquidity and ease of access. However, they come with volatility and correlation with stock markets, which may defeat the purpose of diversifying your portfolio.
Private REITs and Funds
Real estate crowdfunding platforms like Fundrise and Yieldstreet offer private funds and REITs to the general public. While some have been successful, others have faced issues, such as mismanagement. Be sure to do your research before investing.
Secured Loans
Investing in debts secured by real property can provide passive income without the need for direct involvement. Platforms like Groundfloor lend short-term loans to home flippers, offering a low minimum investment of $10.
Real Estate Crowdfunding
Platforms like Arrived allow non-accredited investors to buy fractional shares of single-family rental properties. While returns may not be spectacular, they offer a user-friendly experience with a $100 minimum investment.
Real Estate Syndications
These investments target annualized returns in the mid-teens or higher and come with cash flow, appreciation, and tax advantages. However, they often require high minimum investments and are only available to accredited investors.
Private Equity Real Estate Funds
Investing in real estate funds that own many properties can provide diversification while enjoying private equity benefits. Experienced operators can help capitalize on real estate's earning potential without managing day-to-day responsibilities.
Private Partnerships
Partnering with an active investor allows you to invest passively in real estate, sharing profits and risks. However, it requires enormous trust in the operator's experience and integrity.
You don't need to become a landlord to enjoy the benefits of owning real estate. With these hands-off investment strategies, you can build your portfolio without the hassle of managing rentals.
