How to Invest in Real Estate without Being a Landlord

by Tara Caruso

Real estate can be a great way to invest your money and see a return on your investment. 

However, many people think that you have to be a landlord in order to invest in real estate. This is not true! 

So if you’re interested in investing in real estate but don’t want the hassle of being a landlord, let’s dive in!

Invest in a REIT

Real estate investment trusts (REITs) offer investors the chance to own a piece of a portfolio of properties without the hassle and expense of being a landlord. 

REITs are publicly traded companies that own or finance income-producing real estate, such as apartments, office buildings, shopping malls, warehouses, and hotels. 

When you buy shares of a REIT, you become a shareholder in the trust and are entitled to a portion of the income it generates from its holdings. 

This can provide a steady stream of income, as well as the potential for long-term capital growth. 

In addition, REITs offer the liquidity of a publicly traded security and can be bought and sold on major exchanges. 

As with any investment, there are risks associated with investing in REITs, but for those looking for an easy way to get started in real estate investing without being a landlord of a multifamily or single family home, this can be an attractive option.

investing-in-reits-pros-and-cons

Real Estate Funds

Another way to invest in real estate without being a landlord is to invest in a real estate fund. 

These funds are similar to REITs in that they offer investors the chance to own a piece of a portfolio of properties. 

However, unlike REITs, which are required by law to distribute 90% of their income to shareholders, real estate funds are not required to do so. 

This means that they can reinvest their earnings back into the fund, which can provide the potential for greater long-term growth. 

However, it also means that there is less income available for distribution to shareholders in the short term. 

Real estate funds are also subject to the same risks as any other investment, so it’s important to do your research before investing.

Tactic for Success

Use an online real estate investing platform. These platforms offer a number of benefits, including the ability to research and invest in properties without having to leave your home, and the ability to learn about and invest in different types of properties.

Real Estate Bonds

Another way to get exposure to the real estate market without being a landlord is to invest in real estate bonds. 

These bonds are typically issued by governments or quasi-governmental organizations, such as housing finance agencies, and are used to finance the construction or rehabilitation of residential and commercial properties. 

When you invest in a real estate bond, you are lending money to the issuer and are entitled to periodic interest payments. 

At the end of the term, which is typically 10 years, you will receive your principal investment back. 

Real estate bonds offer a fixed rate of return, which can provide stability in an otherwise volatile market. 

However, as with any bond investment, there is the risk that you will not get your principal investment back if the issuer defaults on the loan.

Real Estate Syndications 

Real estate syndications are a great way to invest in real estate without being a landlord. In a syndication, a group of investors pool their money together to buy a property. 

The property is then managed by a professional team, and the investors receive a share of the profits. This arrangement offers several advantages for investors. 

First, it allows them to diversify their portfolio and spread their risk. 

Second, it gives them access to experienced professionals who can manage the property and maximize returns. 

Finally, it enables them to purchase a property that they would otherwise be unable to afford on their own when browsing through Zillow or Redfin

If you’re looking for a way to invest in real estate without the hassle of being a landlord, syndications may be the right solution for you.

Trend on the Rise

Real estate crowdfunding. Real estate crowdfunding is a way for investors to pool their money and invest in properties together. It’s a relatively new concept, and there are a few different models that companies use. In general, though, real estate crowdfunding platforms allow investors to browse and choose from a variety of different investment opportunities.

Flipping Houses

One of the most popular methods is known as house flipping. Essentially, this involves purchasing a property, making renovations to increase its value, and then selling it for a profit. 

Although it can be a risky endeavor, finding houses to wholesale for house flipping can be a great way to earn a substantial return on investment. 

In order to be successful, however, it is important to have a firm understanding of the local housing market and to partner with experienced contractors who can help you complete the renovations on time and on budget. 

With careful planning and execution, flipping houses can be a profitable venture for investors.

considerations-for-flipping-houses

Things to consider when flipping houses:

  • Research the market – It is important to have a firm understanding of the local housing market before you begin flipping houses.
  • The neighborhood – One of the most important factors to consider when flipping houses is the neighborhood in which the property is located.
  • The condition of the property – This will play a big role in how much you will need to spend on renovations.
  • The cost of renovations – Make sure you have a realistic estimate of the cost of all the renovations you will need to make.
  • The timeline – It is important to have a realistic timeline for flipping a house.
  • The profit potential – There is no point in flipping a house if you are not going to make a profit. Know your numbers and make sure the deal is worth your time and effort.

Wrapping Up

There are a number of ways to invest in real estate without being a landlord. Make sure to do your research and choose an investment that is right for you.

About the Author

Photo of author
Tara is a licensed real estate agent in Southwest, FL. She helps buyers and investors find their dream home by educating them about real estate and how they can use it as an investment.