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Passive or Active Real Estate Investing?
Investing in Real Estate can be approached in two ways, actively or
passively. When actively investing in Real Estate you assume the position of
landlord and sometimes property manager. Passive investing does not include
nearly the same responsibility or time obligations. Passive investing can be
done through partnerships or REITs.
Active Real Estate Investing
Active Real Estate investing takes much more time and can be a career in
itself. With the extra time and effort can come great rewards; active real
estate investing can often create larger returns on your capital than passive
investing. People can either do active investing by developing land, flipping
properties, or renting out property. Sometimes, a combination of these is even
applied.
Passive Real Estate Investing
Passive Real Estate investing can be taken on in a number of ways, including
partnerships and REITs
- Limited Partnership
This was a very popular investment vehicle for passive
investing throughout the 1970s and 80s.
- LLCs and LLPS
Limited liability Companies and Partnerships are a fairly
recent creation in most states.
- REITs
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