4 Ways to Play Real Estate Without Actually Buying Property

Investing in real estate can be a great way to generate passive income and build long-term wealth.

However, not everyone can afford to buy physical property, as it usually requires a large amount of capital. Moreover, not everyone can afford to invest the kind of time, money, and effort needed to maintain a real estate property.

Fortunately, it is possible for you to invest in real estate without buying actual property. Below are four strategies that can help you become a real estate investor without owning property outright.

Real estate investment trusts

Real estate investment trusts (REITs) are probably the best choice for those who want to invest in real estate without buying physical property. When you invest in an REIT, your share of money is pooled with other investors’ money and is used to buy income-generating real estate properties.

The income generated is divided and paid out to the shareholders on a quarterly or monthly basis.

REITs are mandated by the SEC to pay out 90% of their taxable income to their shareholders. Your investment in REITs thus can turn into a source of recurring income for you.

Depending on your preference, you can choose to invest in a publicly traded REIT or a privately held REIT. Generally, publicly traded REITs are considered a better choice due to their transparency and low fees.

Real estate focused funds

There are a number of exchange-traded funds, mutual funds, and index funds that invest in real estate.

Many of these funds have real estate holdings not just in the United States but also in Europe and Asia. Often, investors use real estate as a hedge to offset the performance of stocks and bonds. In the event of a significant market correction or even a recession, you might still get reliable returns from these funds.

Real estate crowdfunding

Real estate crowdfunding platforms allow small, unaccredited investors to invest in real estate and get short-term as well as long-term returns. Your initial investment can be as little as $500.

These platforms pool the investments made by individual investors and buy residential as well as commercial real estate properties.

The rental income from the properties as well as the profits made by selling the properties are divided and paid out to the investors on a quarterly or yearly basis. That too can be a reliable source of passive income.

Hard money loans

If you have cash that you can afford to lend, you can offer hard money loans to real estate investors and flippers. The investor or flipper will borrow money from you, buy the property, renovate it, and sell it to someone else. Once they do, they will repay your loan with interest.

In addition, you can become an equity partner and ask the investor or flipper to share a portion of the proceeds from selling the property instead of repaying your loan with interest.

It should be noted that lending money to flippers can be a risky proposition. It’s important to consult an attorney and create a legally valid agreement that clearly specifies the terms of the loan and protects your interests.

Test Your Financial Advisor’s Loyalty with These Simple Questions

You have a financial advisor in order to make certain you have budgeted your money correctly, have planned for future financial needs, and, in some cases, to turn some of

Sell Puts the Smart Way: Get Out Before Expiration Nears

Selling put options can be a great way to help increase the value of your portfolio without taking on too much risk. At its core, a put sale allows investors


4 Pros and 1 Con of Refinancing Your Home

Two years ago the 30-year fixed mortgage rate was 4.6%. Today it is 2.9%. If your mortgage is in the high threes, you should consider refinancing. Refinancing would lower your

Easy Finance Tip: How to Calculate Your Net Worth

To calculate your net worth, just subtract your liabilities (what you owe) from your assets (what you own). While the equation is simple, it's important to get a snapshot of

Just a Few Bad Market Years Can Slam Your Retirement: How to Cut Your Risk

I believe one very underappreciated risk for investors preparing for retirement is the concept of “sequence of returns.” Sequence of return risk is the danger that the timing of withdrawals

Tai Chi Can Benefits for Those with Chronic Diseases

The Chinese martial art of tai chi can be beneficial to people suffering with chronic illnesses, according to research in the British Journal of Sports Medicine (2015), conducted by Dr.

Two Measures of Options Volatility That Matter

Most people often have a notion of what volatility means. They understand, at least conceptually, that it has to do with data of situations that vary over time. Weather is

3 Financial Habits to Adopt Before You Retire

Nobody wants to work until the day they die. We all want to get to a point where we can simply sit down, relax, and enjoy life.  Consider adopting these

11 Ways Eating Limes Can Protect Your Eyes, Heart, Joints and More

Most of us hear lime and think Corona beer or ceviche. Surprisingly, this little bright green fruit has many excellent benefits for your health and wellness. Limes are often overlooked

Why You Should Take Social Security Early and Invest

Social Security is a government program, so it is unnecessarily complicated. Working or retired? Married or divorced or both? Disabled? Private or public employer? All these factors affect your Social

5 Benefits of Opening a Health Savings Account

The tax advantages of a healthcare savings account are like those of a traditional IRA, a Roth IRA, or a 529 college savings plan. The account can be used like

A Simple, Easy Way to Lower Your Blood Pressure

According to the American Diabetes Association, one in three Americans have high blood pressure, and this condition may lead to other chronic diseases like heart disease and diabetes. There are