Finance

Active vs. Passive Investing in Real Estate

Land is power, and real estate is one of the few things that has not lost value in the past year. If you are thinking about getting into the real estate game, it is time to learn about active vs. passive investing.

This real estate guide will tell you all you need to know about these two forms of real estate investment. Only by selecting a solid real estate investment strategy can you guarantee yourself a profit in this competitive marketplace.

Active Investment Real Estate Guide

If you are looking to invest in real estate with a hands-on approach, then active investment might be your best option. Active investment is the broad term that encompasses all aspects of property purchasing and management.

It includes being a landlord and renting your properties out to tenants. It can also mean buying properties to remodel and flip for a higher price later on down the road. It also includes everything in between the two.

Active investing in the real estate market implies that you are more involved with your real estate purchases than footing the bill. You acquire, maintain and manage your properties directly or with the help of a small team.

If you want to be the best possible active investor, you should learn a thing or two about social impact investing. That way, you can give back to the tenants that support you.

Active investment is only a solid choice for those who have the time and resources to spend actively managing their real estate holdings. If you desire a less hands-on approach, a passive investment may be a better option.

Passive Investment Real Estate Guide

When you invest in the real estate market passively, you are, in essence sitting back and letting your money do the work. You can invest in a reliable real estate investment trust (REIT) or real estate mutual fund.

In this sense, your money is part of an aggregate corporation that manages a bunch of different real estate assets and holdings. If the assets turn a profit for the fund, you will receive dividends and a solid return on your investment.

Passive investment is an excellent choice for those who don’t want to deal with all the stress that acquiring and managing real estate holdings can bring.

While you don’t get the human touch of developing a landlord-tenant relationship or the aesthetic journey of refurbishing a house to flip, you do get a simple way to earn a return on your investment from the sidelines.

Make Your Choice

Active and passive investments in real estate are two great options for anybody looking to invest in the real estate market. When creating your real estate guide, you can choose one investment strategy or mix and match both.

Whichever you choose, talking to a real estate agent for real estate advice is always a good call as well. Start investing in real estate today and see where your journey takes you. Then check out our page for other investment content.