Monthly Archives: May 2013

What Is Passive Real Estate Investing

Investing in real estate is like investing in your future. Real estate has become one of the most important sectors of the economy within countries worldwide. This is the aspect of the economy that deals with lands and all other related properties attached to it, such as buildings. These properties are either freehold or leasehold and they can also come as residential or commercial properties. There are so many ways in which people have access to Passive Real Estate Investments and a few are listed below as follows:

Land Sale:

In real estate, it is possible for investors to buy land and later sell it at a substantially higher price. This land can be located in residential or commercial areas of a city. But most investors in this category typically tend to hold on to the land for a very long time, in order to sell it at a very high price.

Land Lease:

Investors also lease land. This is a situation, where investors buy land and then lease it for a long period of time to people or organizations. The investor still holds the ownership of the land for the lease period and will take full possession again after the lease period has lapsed.

Home Flipping and Selling:

This is a situation, where an investor buys a home and later sells it in order to make a profit. Investors operating in this business model, purchase a home and then carry out all the necessary renovation in order to add more value to the property and allow it to meet up with the current trend in real estate. After the renovation, the home is then sold at a much higher price. One beauty of this business is that there is no limitation to the number of homes you can flip in year, so the sky is the limit to the extent of your financial progress.

Home Flipping and Holding:

This is equally another profitable business in real estate. This involves buying a home, renovating it, if necessary and hold on to it. When people buy a property and hold on to it, they either use it for a personal purpose, or lease out the home to tenants who are in need of it. Leasing a property will give the investor the opportunity to build multiple streams of income from the investment. Such an investor will have access to passive income, while collecting regular rent payments from the tenants residing in the home. Besides, the owner reserves the right to the ownership of the home, as long as HE/SHE keeps possession of it.
However, selling real estate can be fun and profitable, but only if done in the right way. This business involves adequate knowledge and the use of latest strategies. If the whole process is handled clumsily, there is the possibility the investment will suffer a massive setback and this can easily lead to total failure of the business. It is of extreme importance for investors, to be familiar with the necessary skills and the latest trends in selling and buying real estate properties. Of course, passive real estate investment may sound easy — buy a property, fix it up and either sell it for profit or rent it out and then sit on the income or maybe even reinvest that cashflow; there is more to this business than this. People need to understand that the practice is not for the faint of heart.