Active vs Passive Real Estate Investing

passive real estate investing

It is possible to invest in real estate and reap those benefits without all of the headaches of being a landlord like dealing with tenants, toilets, and termites. But how?

In this article, you’ll see the differences between being an active or a passive real estate investor to help guide you in investing your hard-earned money.

What it means to be an active investor – Most people think of buying a single-family home, finding a renter, and collecting monthly rent from the tenant. That sounds easy enough, but the reality of life as a landlord can be quite different.

Even if you hire a professional property manager, you as the landlord are actively involved in the investment. Yes, the property manager handles day-to-day issues, but you will still be involved in strategic decisions. Whether to evict non-paying tenants, file insurance claims when there are losses, negotiate with the bank, and make additional cash investments to cover unexpected maintenance or repair costs.

What It Means To Be a Passive Real Estate Investor

On the other hand, passive investing in real estate is a bit of a “fire and forget” approach. You invest your money and somebody else generally called a “sponsor” does all of the heavy lifting.

The great thing about passive investing is…well, it’s totally passive. There are no calls from the property manager or the tenants, no talking to the bank, the insurance company, and there is minimal paperwork.

The tradeoff with passive investing is you will relinquish some of the control to the sponsor that you otherwise would have. You trust someone else to manage the property and execute the plan on your behalf.

real estate investment chart

Active vs Passive Real Estate Investing: The Conclusion

If you are motivated to roll your sleeves up and tackle all of the various aspects of being a landlord, active real estate investing may be the perfect fit for you.

However, if you are slammed for time, are all thumbs, and have the capital to invest, it may be wise to consider passive real estate investing.

When determining the right path for you and your family, make sure to take into account your unique situation, goals, interests, and aptitude – rarely is there one size fits all.

Frequently Asked Questions

Quam elementum pulvinar etiam non. Nibh praesent tristique magna sit amet purus. Augue lacus viverra vitae congue eu. Bibendum est ultricies integer quis auctor elit sed. Tortor pretium viverra suspendisse potenti nullam ac tortor. Viverra orci sagittis eu volutpat odio facilisis mauris sit amet. Consectetur a erat nam at lectus urna. Senectus et netus et malesuada fames. Tincidunt arcu non sodales neque sodales ut. Nibh praesent tristique magna sit amet purus gravida quis. Ultrices neque ornare aenean euismod elementum nisi quis. Potenti nullam ac tortor vitae purus faucibus ornare suspendisse. Velit egestas dui id ornare arcu odio ut sem. Amet nisl suscipit adipiscing bibendum est ultricies integer quis auctor. Enim sit amet venenatis urna. Nunc sed blandit libero volutpat sed cras ornare arcu. Pellentesque dignissim enim sit amet venenatis urna.

Quam elementum pulvinar etiam non. Nibh praesent tristique magna sit amet purus. Augue lacus viverra vitae congue eu. Bibendum est ultricies integer quis auctor elit sed. Tortor pretium viverra suspendisse potenti nullam ac tortor. Viverra orci sagittis eu volutpat odio facilisis mauris sit amet. Consectetur a erat nam at lectus urna. Senectus et netus et malesuada fames. Tincidunt arcu non sodales neque sodales ut. Nibh praesent tristique magna sit amet purus gravida quis. Ultrices neque ornare aenean euismod elementum nisi quis. Potenti nullam ac tortor vitae purus faucibus ornare suspendisse. Velit egestas dui id ornare arcu odio ut sem. Amet nisl suscipit adipiscing bibendum est ultricies integer quis auctor. Enim sit amet venenatis urna. Nunc sed blandit libero volutpat sed cras ornare arcu. Pellentesque dignissim enim sit amet venenatis urna.

Quam elementum pulvinar etiam non. Nibh praesent tristique magna sit amet purus. Augue lacus viverra vitae congue eu. Bibendum est ultricies integer quis auctor elit sed. Tortor pretium viverra suspendisse potenti nullam ac tortor. Viverra orci sagittis eu volutpat odio facilisis mauris sit amet. Consectetur a erat nam at lectus urna. Senectus et netus et malesuada fames. Tincidunt arcu non sodales neque sodales ut. Nibh praesent tristique magna sit amet purus gravida quis. Ultrices neque ornare aenean euismod elementum nisi quis. Potenti nullam ac tortor vitae purus faucibus ornare suspendisse. Velit egestas dui id ornare arcu odio ut sem. Amet nisl suscipit adipiscing bibendum est ultricies integer quis auctor. Enim sit amet venenatis urna. Nunc sed blandit libero volutpat sed cras ornare arcu. Pellentesque dignissim enim sit amet venenatis urna.

Andrew Stafford

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Eu consequat ac felis donec et.

We Make Financial Planning Stress-Free!

Our Team-Based Approach is Comprehensive & Easy

1

Learn About You

Your Vision
Your Objectives
Your Opportunities
Your Challenges
Your Entire Picture (ie. Business & personal)

2

Develop Custom Strategies

Based on your unique situation
Leverage our team of experts
Establish wealth creating strategies
Determine ideal source of asset transfer

3

Build Wealth

Agree on and implement strategies
Establish tracking tools
Communicate regularly
Support you with a financial BOD

Featured In

Get the Book Now!

Name(Required)
Address(Required)

Get the Book Now!

Name(Required)
Address(Required)