Investment StrategiesThree Passive Investment Strategies for Investing in Real Estate by Victoria Daibes February 21, 2018February 20, 2018 by Victoria Daibes February 21, 2018February 20, 2018Investing in real estate is one of the best investment strategies for long-term financial security and independence. Many jump ship to invest in real estate to build wealth and accumulate equity to safeguard for retirement and earn passive income aside from their full-time gig. Almost anyone can start investing, and quite frankly, start investing as early as possible. The sooner you start investing, the less risk you take on, and the more room you have for growth and learning to make money faster and double your returns. Passive Investing vs. Active Investing There is no one way to make money in real estate investing. As a real estate investor, you call the shots and decide on the best investment strategies to grow your returns and diversify your real estate investment portfolio. The first thing you must figure out is your investment strategy and your business plan in the long term. Decide what the best real estate strategy is, given your financial means, resources, and vision. How much do you want to make in real estate investing? And how much are you willing to put it in terms of hard work and time?Related: What’s the Best Investment Property Based on Your Investment Strategy?Active Real Estate InvestingIf you decide to ‘actively’ invest in real estate, this means you will be managing and micro-managing your real estate business. Active investing is a full-time job of running and operating your real estate business. All the nitty gritty of operating, including but not limited to: buying rental properties, leasing rental properties, conducting real estate marketing analysis, obtaining a loan, maintenance and upkeep, tenant complaints, and the list goes on and on.The best aspect of active investing is the total control and discretion real estate investors have over their investments. The downside is the overwhelming feeling of running a business and handling the not-so-fun aspects of being your own boss. Passive Real Estate InvestingOn the other side, investing in real estate for passive income requires less work and is more hands off because there is a team of real estate professionals running and managing the business and the investments on the investor’s behalf. You passively invest and trust in others to manage your investments. The only control you have as a passive investor is to buy or sell real estate investments.Investing in Real Estate: Three Passive Investment Strategies Investing in Real Estate #1: Turnkey Real Estate PropertiesIf you prefer investing in real estate passively, consider buying rental properties from a turnkey company to avoid the hassle of rehabbing and leasing investment properties on your own. In a nutshell, you get a rental property with tenants on a silver platter, but for a hefty price. It goes without saying that turnkey properties are a little more expensive than getting your hands dirty and proactively rehabbing and getting your rental property up and running. Turnkey real estate is right for you if you fall under one or more of the following categories:Investors who want to buy long distance real estate First-time investors with minimal knowledge and experience in real estate investing Hands off investors who are too busy to manage their own real estate propertiesInvestors who want a long-term investment strategy with steady cash flowLow-risk investors who don’t want to invest in a fix-and flip real estate strategyInvesting in Real Estate #2: Real Estate Syndication or Crowdfunding Another way to invest in real estate hands-free is through crowdfunding. As the name suggests, the crux of crowdfunding is a real estate syndication bringing investors to pool their money to invest in a big real estate venture for a greater profit for all. The profit or the passive income acquired from the real estate investment is split evenly amongst the shareholders or investors. These real estate ventures can range from single family house flips to large apartment complexes, giving real estate investors the option to choose which pool they want to invest in for passive income. There is little control and autonomy for investors involved in a real estate syndication, but the perk is that they passively invest for money without having to do much work. Investing in Real Estate #3: Professional Property ManagementBuying and managing rental properties with the help of a property manager is another option for real estate investors looking to invest passively. Once you get your rental property up and ready for lease, you can hire a property manager to take over and manage the rental property and the tenants on your behalf. In this way, you won’t worry about the hassles of finding tenants, setting and collecting rent, eviction notices, dealing with maintenance and upkeep, etc.Related: 6 Best Hacks to Finding Homes Below Market Value for Investment PropertiesDo You Need a Professional Property Manager for Investing in Real Estate? Ask yourself the following questions:1. Is your rental property far away from your home? It would be hard to manage your rental property if it is far away from your home residence. Keep in mind that the further the rental property, the harder it is to manage and respond to emergencies in case they arise. In this case, hiring a good property manager makes more sense and can save you money.2. How many rental properties do you own? Are they close in distance or far apart?If you own more than one housing unit, the more tenants you will have, and the more responsibilities you will incur as a result. You will have to deal with more maintenance issues, complaints, vacancies, etc. Also, it might be costly to manage your rental properties if they are dispersed and spread apart. In this case, hiring a professional property manager might make more sense and be more cost effective. 3. Can you afford hiring a professional property manager?Make sure to assess your finances before you go ahead and hire a property manager. The cost of hiring a property manager will fall in the range of 4% – 10% of your property’s monthly gross income.4. Do you have the time to manage your rental property?If you have time for investing in real estate and managing your rental property, then it is in your best interest to take full control over your operations and stay in charge. 5. Do you have a high vacancy rate or problems with your cash flow?If such problems arise, consider hiring a professional more experienced in this domain to mitigate these risks and increase your cash flow returns. 6. Are you a people person?If you like dealing with people and especially tenants, then maybe hiring a professional property manager won’t be necessary after all. If the opposite is true, and your tolerance for dealing with tenants is fairly low, then hire a professional property manager ASAP.Related: What Are the Best Ways for Real Estate Investors to Get Rich?Conclusion If you are bunched for time or find active real estate investing as a demotivator to start investing in real estate, then your best bet is to consider the prospect of passively investing for attaining the best return on investments and long-term financial security. If you liked this post, subscribe to Mashvisor blog for more real-time insight and advice! Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Victoria DaibesVictoria is an experienced content writer who enjoys writing about all aspects of the real estate market and industry. 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