There is so much to be learned about passive real estate investing, depending on the type of properties you want to invest in. However, there are factors you need to understand before any time of real estate investing entirely. Below are the top three factors that every interested in passive real estate investing needs to know.

1. Passive doesn’t mean you will have no involvement.


Passive real estate investing does not mean you buy some properties and start collecting the paychecks. Passive means someone else will be running the day-to-day operations. You will still need to keep track of your investments, make important decisions, and consult with those running the day-to-day regularly to stay on top of possible problems.

For example, you can buy a commercial rental property and rely on a management company to handle all the day-to-day operations of the building. The management company will handle marketing and renting the space, as well as collecting the rent, addressing maintenance issues, and taking action of the tenant stops paying.

You will be there to direct the management company on how you want the property run, your standards for tenants, and approving large purchases or repairs. There is still a lot that needs to be done at the investor level, but it is not a daily job, which makes it passive income.

2. There are many types of passive real estate investing.


There are many forms of passive real estate investing. If you are interested in owning and renting a property, you can invest in either residential or commercial properties and then renting them to people or businesses interested in the space. Rental laws vary by community, so you need to be aware of what laws and regulations you will be held to based on the city you buy property in. You will also want to look into eviction laws before buying as some communities make it more difficult than others to take action against tenants that refuse to pay their rent.

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If you are not interested in being a landlord, you can buy run-down properties that can be renovated and resold at a profit. This type of investing can remain passive if you have a project manager put in charge of the renovation process. Similarly to being a landlord, you will be there for significant decision making and guidance on expectations for the property, work, and timeline.

You can also invest in undeveloped land, which will provide you with the option of developing it or selling it to a developer. If you decide the develop the property, you can work with contractors and project managers to take on the bulk of the work, so it remains a passive investment for you. You will need a clear vision for development, which needs to include what you see as the outcome.

For example, you can develop the land to sell it then, or develop the property with either residential or commercial buildings and then rent then becoming a landlord. If you do not want to go through the process of developing the land yourself, you sell the land to a developer. If you’re feeling overwhelmed by all of this, you can take an online property course from experts such as Glenn Armstrong to help you quickly learn.

3. There is a tremendous amount of potential.


Real estate has always been an excellent investment opportunity for people interested in passive or active investments. Real estate is a substantial investment because it still has value. Even if a building is condemned and needs to be torn down, the land it sits on has value. You can start investing in real estate while working a full-time job, and then eventually leave your job to focus entirely on your real estate. There are enormous possibilities all over the country, so the potential is not dependant on where you live.

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