Welcome to Q & A Wednesday on Millionaire Habits where I answer one of your questions every week for the benefit of 20,000 people.
💡 Question: “Steve, I want to start investing in real estate but I don’t want to be a landlord. Is there a way to do this without buying and renting a house?”
You’re in luck because the answer is a resounding yes.
There are a number of ways to start investing in real estate. Buying and renting out a house is one way, but it’s far from the only way.
Here are 5 excellent non-landlord options to invest in real estate:
- Real Estate Investment Trusts (REITs): REITs are companies that own, operate, or finance income-generating real estate. By investing in REITs, you can buy shares like stocks and become a partial owner of a diversified portfolio of properties. REITs typically distribute the majority of their rental income as dividends to shareholders. This is my favorite way to invest in real estate without becoming a landlord. It’s quick and easy.
- Real Estate Crowdfunding: Crowdfunding platforms allow you to invest in real estate projects alongside other investors. These platforms pool funds from multiple investors to finance properties such as residential, commercial, or development projects. You can invest with a relatively small amount of money and diversify your portfolio across various projects.
- Real Estate Mutual Funds or ETFs: Similar to REITs, real estate mutual funds or exchange-traded funds (ETFs) offer a way to invest in real estate indirectly. These funds invest in shares of REITs or real estate-related companies, providing you with exposure to the real estate market without the need for direct property ownership.
- Real Estate Notes: Investing in real estate notes involves purchasing mortgages or loan agreements. Instead of owning the property, you become the lender and receive interest payments from the borrower. This option allows you to earn income without dealing with property management responsibilities.
- Buy and hold land: Lastly, a great way to invest in real estate is to buy and hold onto parcels of land in the hopes they increase in value. You can also buy land for cash and sell it “owner carry,” which means you essentially act as the mortgage company, and the buyer makes monthly payments to you.
Want to invest in real estate without being a landlord? Don’t worry, there are plenty of options. REITs are the easiest way to start investing in RE.