5 Ways to Invest in Property Without Owning It
When considering investing in property, buying a house or apartment to rent out or flip for profit is generally what comes to mind.
But while these physical aspects of real estate are perhaps the most well-known ways of investing in property, there are other ways to do so. Investing in property isn’t always about putting down a deposit on a building. There’s wholesaling, REITs, crowdfunding, partnering up with other investors, and providing the money for others to invest.
In this article, we’ll look at the five different ways you can invest in property without owning or maintaining it directly yourself, thus standing to gain profit from a more passive position.
1. Wholesaling
One of the most popular and accessible ways for people to invest in property without owning it is wholesaling. With a wholesaling strategy, you buy a contract to purchase a property, but then instead of going through with the sale, you sell the contract to someone else for a good price.
Wholesaling is considered one of the best ways to invest in property without owning it because it doesn’t require much capital to begin with, making it an easy choice for new investors.
2. Crowdfunding
Property crowdfunding is what happens when an individual or company raises large sums of money in order to secure or officiate real estate transactions. Similarly to other types of crowdfunding, property crowdfunding is typically achieved by making a public pitch online.
Essentially, property crowdfunding enables you to finance the development of real estate projects in exchange for equity or profit, along with distributions.
3. Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts
are another great way to invest in property without buying it directly. Similar to stocks, REITs can be traded interchangeably with market trends.
REITs are very conducive to diversification because they can be used to purchase just about every type of property, including apartments, industrial warehouses, and commercial offices. There’s a REIT available that works for every type of real estate, making it an agile choice.
4. Be The Bank For Another Investor
If you want to invest in property but don’t have the experience or time, you might consider financing somebody else’s real estate investment in return for profit. This is what it means to “be a bank” for someone else.
Being a money lender is a very straightforward, hands-off approach to non-ownership-based property investment, so it works well for people with a lot of capital and limited experience.
Connect with a trusted entity or individual to finance a sale and turn a profit when they flip it. This is generally considered the best route for this kind of investment.
5. Partner With Other Investors
If you’re interested in the idea of property investment but not property ownership, consider partnering with other investors you trust to make it a team effort. This is typically achieved through real estate syndications, but you can create an investment group based on who you trust.
Let someone else on the team be responsible for everything from sourcing real estate leads to closing the deal and taking ownership. Depending on the investment agreement, you may continue to play a passive role, or you may assume responsibility for the management or maintenance of the property thereafter.
Buying Is Not The Only Option
Contrary to popular belief, you don’t need to own property to make a profit from it. In fact, there are many other, sometimes better, ways to do so.
Wholesaling, REITs, crowdfunding, partnering with investors, and allowing other property investors to use your money as capital are five of the simplest, most common ways to profit from property. Using any one of these methods, you can make good returns on a property without needing to own it yourself.
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