How To Become A Property Owner Without Being A Landlord
Are you looking for ways to invest in real estate but don’t want to deal with construction project management? Worry not. There’s a perfect solution. Property ownership is now taking a different approach that’s convenient and has the potential to bring significant returns for you.
Fractional ownership is becoming more popular in the real estate market, and more investors are jumping to enjoy the benefits. You can passively invest and earn through fractional real estate by owning residential and commercial property or both. It relieves the headache of managing your property and gives you time to concentrate on other essential things.
Suppose you’re wondering whether becoming a property owner without being a landlord is possible. This article will show you how to pivot yourself and take advantage of this opportunity in the real estate market.
1. Real Estate Investment Trusts (REITs)
Real estate investment companies offer investors opportunities to buy upcoming construction projects or existing property shares. They manage all the properties on your behalf and distribute proceeds collected from them depending on your contribution or share.
The REITs company will provide the frameworks of the property management beforehand and explain the expected returns. You can then decide whether or not the proposal fits your portfolio brackets.
In addition, REIT shares are tradeable through public trades, and you can buy or sell them due to the liquidity nature of the real estate. However, you can also invest in private REITs that aren’t easily traded in the stock markets.
2. Real Estate Investment Groups (REIGs)
REIGs is another simple way to own property that doesn’t need your involvement as a landlord. It’s a group of investors looking to capitalize on commercial real estate through several income streams.
Typically, they raise funds to buy commercial properties such as shopping malls, apartment projects, and buildings with excellent ROI potential. Once the projects are functional, the group of investors’ rental income and other property management fees are collected from building occupants.
3. Real Estate Crowdfunding
The ideology behind crowdfunding is to pool public funds to support a project and share the returns depending on how much you contribute. Real estate is borrowing the same strategy to fund upcoming projects and avoid getting loans from lenders like banks.
Property developers create real estate crowdfunding platforms and post details of the planned projects. You can read through the proposals and express interest by applying.
However, due diligence is crucial in property ownership since the idea is still new, and projects can fail. You must consult the real estate investors community to get more insights into such platforms.
4. Real Estate Syndication
In real estate, buying properties, whether off-plan or complete, can be expensive for a first-time investor and may discourage you from pursuing property ownership dreams. To make it affordable, you can consolidate funds in a group, buy that expensive property, and wait for the value to appreciate.
Later, you can decide to sell the property at the preferred market price and recoup your investments plus the appreciated value as profits. So, you must have the same property ownership interest to leverage the real estate syndication plan.
5. Partner Investments
In business, partnership means shared risk when investing or running an establishment. It ensures that you and your partners contribute equally to support the purchase and management of the underlying property. Buying or owning property in the real estate market can take the same course. Alternatively, you can choose to hire or appoint someone to manage the properties on your behalf.
6. Become A Real Estate Broker
You can become a real estate broker and look for properties for sale. There’s always someone looking to buy a real estate property that’s well-built or managed. After that, you can get into an agreement or contract price with the willing seller and search for prospects.
Once you find one, you can hand over the contract to a willing investor at a higher price. It allows you to earn from the sale by collecting the price difference between the property and the willing buyer.
7. Property Flipping
Property flipping entails buying, renovating, and selling properties damaged by poor maintenance practices. You can leverage such opportunities by researching the properties with potential and approaching lenders such as banks to support your project.
Once completed, you can sell the property at a higher margin to ensure that you can repay the lenders and remain profitable. You can take a bridge loan to facilitate the renovations since it requires a short-term repayment period and can wait till you make property sales.
Final Thoughts
The real estate market has several ways that allow you to own property without being a landlord. You can choose to invest through a REITs company or as a group of individuals with a common goal and avoid managing the properties yourselves. However, you must research beforehand to avoid investing in illiquid real estate or projects that can fail due to a lack of clear return on investment goals.