Ways to Invest in Real Estate Without Buying Property

Invest in Real Estate without Buying Property

Make Money From Property Without Buying it

Investing in real estate doesn’t mean you have to actually buy or own physical property. In fact, investing in real estate can be a smart and lucrative part of diversifying your investment portfolio. There are many ways to invest in real estate without buying any property. While the real estate market has its own set of rules and types of investments in this regard, there is plenty of opportunities if you know what you are looking for and what your objectives are. Below are the ways to invest in real estate today without buying any property.

Become a landlord without paying a dime

One of the easiest and most lucrative ways to become a landlord without paying a dime is to inherit property. That being said, you can also purchase property for a family member like one of your children, therefore, you wouldn’t technically be purchasing the property yourself but still investing in it.

If you do inherit property, you would not be the one actually paying for it but you would become a landlord upon inheriting it. This is an ideal and smart way to get into real estate without a huge upfront cost but does require some planning on yours, a friends’, or family member’s part.

REIT Investment

If you aren’t planning on inheriting any property in the future, your next option would be a REIT investment or a real estate investment trust.

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This is an investment in a company that owns a lot of “income-producing” properties. Basically, they own a lot of properties that are profitable all at once, and you are investing in their property investments. This is a great way to invest in real estate without actually purchasing any physical property yourself.

Most of these companies are publicly traded companies, and you have your options as far as companies that invest in certain types of properties as well, whether that be offices, shopping centers, hotels, hospitals, what have you. This gives you options as far as what exactly you would like to invest in, again, without actually paying any amount towards ownership of the physical property.

Invest in a real estate company

There are a lot of companies that function in the real estate market in various ways, especially with the recent advances in technology and use of the internet and online databases within the market.

There are many real estate companies available for investments that have nothing to do with physical property. A lot of online real estate companies are attempting to disrupt the modern real estate market by bypassing agents and offering commission back to a seller. An example of this is the online-based real estate startup beycome. Lucrative, modern companies like this are within the real estate industry but are open for investment without buying property.

Invest in real estate mutual funds

A real estate mutual fund is another option. These are commission-free, unlike REITs, but similar to REITs you can purchase a mutual fund outright and invest in various property types. The main difference here is that a mutual fund is not publicly traded like a REIT.

Properties in mutual funds can be invested in either directly or indirectly through REITs, however, and they usually have a different portfolio than straight REITs. These real estate funds are usually inclusive of commercial and corporate property (though there are always exceptions).

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The fund itself goes towards the investment of the property – you would be investing in the fund, versus, REITs are companies that own the property already and you are investing in the company of ownership itself. It’s a bit further removed from any specific property type than a mutual fund and is more focused on receiving a profit at the sale of an investor’s holdings without commission.

It is up to the investor whether or not they would like to invest their money into a real estate fund that is directly invested into the property versus indirectly invested through a REIT. There are mutual funds that ultimately have the option of investing in the fund first, but then the fund is indirectly invested from there into a REIT. Again, this is up to the investor, but the various options are worth mentioning as they each offer a different potential.

Rent part of your home

Another way to invest in real estate is rent part of the home or property you already own. This is a great way to create passive income through the property you own and invest in creating an appropriate rental space for the price you ask for.

You can become a landlord in this way without having to purchase any new property! You may, however, need to make some necessary investments in renovations prior to renting a part of your property – but you will not need to purchase any new property outright.

A lot of times this can simply include cleaning up and restoring an extra bedroom. You could also invest in an entire addition to your house or a separate detached cottage to rent out, too. There are options as far as creating a space in the property you already own to begin renting it immediately. You may have a bedroom with an en-suite bathroom already available for guests in your home – consider renting it out!

You can even combine this suggestion with the first one, if you are in the position to, and not only inherit property but upon inheriting it, rent it out as well.

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The bottom line

Investing in real estate is a risk, but if you understand what you are getting yourself into and why, you could be looking at a solid reward. There are ways to invest in real estate without buying any property, especially today.

Whether you are looking to invest in a REIT or a mutual fund, or rent the property you already own, there are ways to create passive income in the real estate market and not spend a dollar on any new properties.

Take these options into consideration when you are looking to diversify your investment portfolio and enter the real estate market and you will be well on your way to finding the benefits of investing in real estate without purchasing any property.

About Archi 53 Articles
Archi is an independent finance and investment advisor since 4 years and recently added with Investment Pedia. User are welcome to put questions on her contributions.

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