Passive Real Estate Investors Learn To Grow Wealth 2023

Passive real estate investing is a popular investment strategy for those who want to invest in real estate without actively managing the property. As a passive real estate investor, you can partner with others who have the knowledge and experience to manage the property, allowing you to invest in real estate without having to be hands-on.

Passive investments in real estate can be a long-term investment strategy, providing a steady stream of income through rental properties or appreciation in value over time. Airbnb properties can also be a form of passive real estate , as investors can purchase and manage properties remotely while earning income from short-term rentals.

Remote ownership is becoming more common for passive real estate investors, as technology allows for easier management and communication with partners and property managers. This means that you can invest in properties located anywhere in the world without having to physically be there.

There are many examples of passive real estate that you can consider. One option is investing in REITs (real estate investment trusts), which allow you to invest in a portfolio of properties managed by professionals. Another option is crowdfunding platforms, which allow you to pool your money with other investors to fund large-scale projects.

You may also consider purchasing shares in a property syndicate, where multiple investors come together to purchase a single property. This allows you to benefit from the expertise of others while minimizing your risk.

It’s important to do your due diligence before making any investment decisions. Make sure that you understand the risks involved and have a clear understanding of how your money will be used.

Benefits of Passive Real Estate

Regular Income Stream

Passive real estate investing provides a regular income stream without the need for active involvement. Unlike stocks or other investments that may fluctuate in value, passive real estate offer consistent cash flow through rental income. This steady stream of income can provide financial stability and security for investors.

Potential for Long-Term Profit and Appreciation

In addition to regular income, passive real estate investments offer the potential for long-term profit and appreciation. As properties increase in value over time, investors can benefit from capital gains when they sell their investment property. This makes passive real estate investing an attractive option for those looking to build wealth over the long term.

Diversification and Risk Reduction

Passive real estate allows investors to diversify their portfolio and reduce risk. By spreading their investments across different types of properties or locations, investors can minimize the impact of any one property performing poorly. Because real estate tends to be less volatile than other types of investments like stocks or bonds, it can provide a stable foundation for a well-diversified portfolio.

Time and Resource Freedom

The passive nature of these investments frees up time and resources for other pursuits. Unlike active real estate investing where investors must manage properties themselves or hire someone to do so, passive real estate investing allows investors to sit back while professional management takes care of everything from tenant screening to maintenance requests.

Professional Management Expertise

With passive real estate, investors can benefit from professional management and expertise. Property managers have years of experience handling everything from rent collection to repairs, making them well-equipped to handle any issues that arise with an investment property. This expertise not only ensures that properties are well-maintained but also helps maximize returns on investment.

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Financial Stability and Security

The ability to generate passive income through real estate investments can provide financial stability and security. With a reliable source of income coming in each month, investors can rest easy knowing that they have a steady stream of cash flow to cover expenses or unexpected emergencies. Because real estate tends to appreciate in value over time, investors can build wealth and secure their financial future.

Understanding Multifamily Passive Real Estate

Benefits of Multifamily Passive Real Estate

Diversification and Higher Returns

Investing in multifamily real estate provides passive investors with an opportunity to diversify their portfolio. Unlike investing in a single-family home, investing in multifamily properties allows investors to spread their risk across multiple units. This means that if one unit is vacant or requires maintenance, the investor can still generate income from the other units. Moreover, multifamily real estate investments offer higher returns compared to investing in family homes. According to a report by CBRE, multifamily properties generated an average annual return of 9.75% between 2010 and 2020.

Economies of Scale

Multifamily real estate investments also offer economies of scale. Since expenses such as maintenance and management can be spread across multiple units, the cost per unit decreases significantly. For instance, if an investor owns ten single-family homes, they would have to hire ten different property managers and contractors for maintenance and repairs. However, if they invest in a ten-unit apartment building, they only need one property manager and contractor for all the units.

Passive Income Generation

One of the primary benefits of passive real estate is generating income without having to manage the property themselves actively. In multifamily passive real estate investing, the investor receives rental income from tenants without having to deal with tenant issues or perform day-to-day management tasks like collecting rent or handling repairs.

Tax Benefits

Investing in multifamily real estate offers several tax benefits that can help reduce an investor’s tax liability significantly. For instance, depreciation is a non-cash expense that allows investors to deduct a portion of their investment’s value each year on their taxes.

Risks Involved in Multifamily Passive Real Estate Investing

Market Volatility

Like any other investment class, multifamily real estate investments are subject to market volatility and economic downturns. During recessions or market crashes, occupancy rates may decrease, and rental income may decline. Moreover, multifamily properties require significant capital investments, making it challenging to sell the property quickly if the market conditions are unfavorable.

Property Management Risks

While passive real estate investing allows investors to generate income without actively managing the property, they still have to deal with property management risks. For instance, if the property manager is not competent or fails to perform their duties correctly, it can lead to tenant issues and vacancies that can hurt an investor’s returns.

Evaluating Passive Real Estate Investment Opportunities

Evaluate the Potential Return on Investment (ROI)

When evaluating a passive real estate opportunity, it is crucial to consider the potential return on investment (ROI). This includes projected rental income and appreciation. Before investing, research the local real estate market conditions and trends in the area where the investment property is located. Look for areas with high demand for rental properties, as well as those that are expected to experience growth in property values.

It’s also important to evaluate the track record and experience of the real estate investor or investment firm offering the opportunity. Look for a proven history of successful investments and satisfied investors. Consider their investment strategy and whether it aligns with your own goals.

Assessing Risk

As with any investment, there is always an element of risk associated with passive real estate investing. It’s essential to assess this risk before making any decisions. Consider any potential legal or financial liabilities associated with the investment.

Compare passive real estate investment opportunities to other types of investments such as real estate investment trusts (REITs) or stocks. Determine which option aligns best with your overall investment strategy.

Location Matters

The location of an investment property can significantly impact its potential ROI. Research areas that have high demand for residential rental property or commercial real estate space. Look for areas that are experiencing population growth or job growth, as these factors can drive up demand for rental properties.

Consider investing in residential rental properties near universities or colleges, where there may be a constant stream of renters looking for housing options close to campus. Alternatively, invest in commercial real estate space near busy shopping centers or office parks.

Comparing Passive Real Estate Investments

Passive real estate investments offer several advantages over active real estate investing. With passive investments, you don’t need to worry about managing tenants, maintenance issues, or other day-to-day tasks associated with owning rental properties actively.

Investing in a REIT provides diversification across multiple properties and markets, reducing the risk associated with investing in a single property. REITs also offer liquidity, allowing investors to buy and sell shares quickly.

On the other hand, investing directly in an investment property provides more control over the investment and allows for potential tax benefits such as depreciation deductions.

Top Markets for Passive Real Estate Investors

New York: A Top Market for Passive Real Estate

New York is one of the top markets for passive real estate due to its high demand for rental properties and strong job growth. The city’s population continues to grow, with an estimated 8.3 million residents as of 2021, making it the most populous city in the United States. With such a large population, there is always a need for housing, which creates opportunities for real estate investment.

In addition to residential properties, New York also offers opportunities for investing in commercial real estate such as office buildings and retail spaces. Companies like Blackstone and Brookfield Asset Management have invested heavily in the city’s real estate market due to its potential for long-term returns. However, entry costs can be high in New York compared to other markets, so it’s important for passive real estate groups to do their research and work with experienced professionals to identify the best opportunities.

Los Angeles: Another Top Market for Passive Real Estate

Los Angeles is another top market for passive real estate investors due to its strong job growth and diverse economy. The city has a population of over 10 million people and is home to many major industries including entertainment, technology, healthcare, and aerospace. This diversity makes Los Angeles less susceptible to economic downturns than other cities that rely on a single industry.

The city’s housing market has been consistently strong over the years due to high demand from renters who are drawn by the city’s warm climate and lifestyle offerings. In addition to traditional residential properties, Los Angeles also offers opportunities for investing in commercial real estate such as industrial warehouses and office buildings.

San Francisco: A High-Potential Market

San Francisco is known as one of the most expensive cities in the United States but also offers some of the highest potential returns on investment for passive real estate investors. The city has a thriving tech industry that continues to attract young professionals who are willing to pay a premium for housing. The city’s population is expected to grow by 10% over the next decade, which will create even more demand for rental properties.

San Francisco also offers opportunities for investing in commercial real estate such as office buildings and retail spaces. Companies like Starwood Capital Group have invested heavily in the city’s real estate market due to its potential for long-term returns. However, entry costs can be high in San Francisco compared to other markets, so it’s important for passive real estate capital investors to do their research and work with experienced professionals to identify the best opportunities.

Boston: A Growing Market

Boston is another top market for passive real estate investors due to its strong job growth and growing population. The city has a population of over 700,000 people and is home to many major industries including healthcare, education, and finance. The city’s economy continues to grow, which creates opportunities for real estate investment.

In addition to residential properties, Boston also offers opportunities for investing in commercial real estate such as office buildings and retail spaces. Companies like Blackstone have invested heavily in the city’s real estate market due to its potential for long-term returns. However, entry costs can be high in Boston compared to other markets, so it’s important for passive real estate capital investors to do their research and work with experienced professionals to identify the best opportunities.

Washington D.C.: A Stable Market

Washington D.C. is another top market for passive real estate investors due to its stable economy and consistent demand from renters who work in government or related industries. The city has a population of over 700,000 people and is home to many major government agencies including the White House, Congress, and Supreme Court.

The city’s housing market has been consistently strong over the years due to high demand from renters who are drawn by the city’s political atmosphere and lifestyle offerings. In addition to traditional residential properties, Washington D.C. also offers opportunities for investing in commercial real estate such as office buildings and retail spaces.

Building a Diversified Passive Real Estate Portfolio

Diversification: The Key to Building a Successful Passive Real Estate Portfolio

Asset Class Mix

Investors should consider a mix of asset classes. This means investing in different types of properties, such as apartment buildings and storage units, as well as mutual funds. By spreading risk across multiple asset classes, investors can maximize returns while minimizing the impact of any one investment’s poor performance.

Individual Stocks vs. Management Company Shares

Owning individual stocks can be risky and require hands-on management. On the other hand, owning shares in a management company can provide more control without the work. This is because management companies are responsible for handling day-to-day operations and maintenance of the property. By owning shares in a management company, investors can benefit from passive income streams without having to worry about managing the property themselves.

Dividends for Wealth Building

Dividends from passive real estate investments can help build wealth over time by providing a steady stream of income without the need for active management. This is especially true when investing in mutual funds that specialize in real estate assets or REITs (Real Estate Investment Trusts). These types of investments offer regular dividend payments based on rental income generated by their underlying properties.

Case Study: Diversified Passive Real Estate Portfolio

Consider an investor who owns 50% ownership in an apartment complex and 50% ownership in a storage unit facility. The apartment complex generates consistent monthly rental income while the storage unit facility provides additional revenue streams through ancillary services like truck rentals and packing supplies sales.

In addition to these two physical properties, our investor also invests in mutual funds that specialize in commercial real estate assets and REITs with holdings across various sectors such as office buildings, retail spaces, and industrial warehouses.

By diversifying their portfolio across multiple asset classes, our investor has minimized risk while maximizing returns through both passive rental income streams and dividend payments. This diversified approach has allowed them to build wealth over time without the need for active management.

Financing Options for Passive Real Estate Investors

Real Estate Crowdfunding: A Passive Investment Option

Real estate crowdfunding is a relatively new investment option that allows passive investors to invest in rental properties without having to deal with the day-to-day responsibilities of managing the property. Real estate crowdfunding platforms pool money from many investors to purchase and manage a portfolio of properties. By investing in real estate crowdfunding, passive investors can benefit from the cash flow generated by rental properties while avoiding the hassle of property management.

One advantage of real estate crowdfunding is that it allows individual investors to invest in real estate alongside other investors. This means that even small investors can participate in large-scale real estate projects that would otherwise be out of reach. Because real estate crowdfunding platforms are typically online, they offer easy access to a wide range of investment opportunities.

Real Estate Funds: Another Passive Investment Option

Real estate funds are another option for passive investors looking for income investments. Like real estate crowdfunding platforms, these funds pool money from many investors to purchase and manage a portfolio of properties. However, unlike crowdfunding platforms, which often focus on individual properties or small portfolios, real estate funds may invest in larger portfolios or even entire commercial buildings.

One advantage of investing in a real estate fund is that it offers diversification benefits. Because these funds invest in multiple properties or portfolios, they spread risk across different assets and markets. This can help reduce overall risk and increase potential returns.

Private Equity Firms: An Option for Accredited Investors

Private equity firms may also offer opportunities for accredited investors to invest in real estate projects and receive a share of the income stream generated by rental properties. These firms typically require high minimum investments and target accredited investors who meet certain wealth or income requirements.

One advantage of investing with private equity firms is that they often have extensive experience and expertise in managing large-scale real estate projects. This can help ensure that investments are well-managed and generate steady income streams over time.

Other Passive Investment Options

In addition to real estate crowdfunding, real estate funds, and private equity firms, there are other investment options available to passive investors. Real Estate Investment Trusts (REITs) are one such option. REITs are companies that own and manage income-generating real estate properties. By investing in REITs, passive investors can benefit from exposure to the real estate market and a steady stream of rental income.

Another option for passive investors is to invest in rental properties through turnkey providers. These providers purchase distressed or foreclosed properties, renovate them, and then sell them to investors as fully managed rental properties. By investing in turnkey rental properties, passive investors can benefit from the cash flow generated by the property without having to deal with the day-to-day responsibilities of managing it.

Tax Implications and Risks of Passive Real Estate Investing

Risks of Passive Real Estate Capital Investment

Passive real estate may seem like an easy way to make money, but it comes with its own set of risks. One of the biggest risks is the possibility of not generating enough rental income to cover expenses, resulting in financial losses. This can happen if there are periods when the property is vacant or if tenants fail to pay rent on time. In such cases, passive real estate capital investors may have to dip into their personal savings or take out loans to cover expenses.

Another risk of passive real estate capital investing is the potential for unexpected expenses, such as repairs or maintenance, which can eat into profits and increase overall costs. For instance, a sudden leak in the roof or a malfunctioning HVAC system can lead to costly repairs that cut into profits. These unexpected expenses can be particularly challenging for passive investors who do not have experience managing rental properties.

Disadvantages of Passive Real Estate Capital Investing

Passive real estate investors may also face disadvantages which means that passive investors will need to pay taxes on this income. However, they may not be able to deduct losses from their rental properties against other forms of income, such as wages or salaries.

This means that if a passive investor has a loss on their rental property, they cannot use that loss to offset their other sources of income and reduce their tax liability. This can result in higher tax bills for passive investors who experience losses on their rental properties.

Tax Implications of Passive Real Estate Capital Investing

Passive real estate capital investors should be aware that there are several tax implications associated with owning rental properties. The most significant tax implication is that rental income is considered taxable income by the government.

Passive investors will need to report all rental income received during the year on their tax returns and pay taxes on this income. They may also be required to pay self-employment taxes if they actively participate in the management of their rental properties.

In addition to paying taxes on rental income, passive investors should also be aware of other tax implications associated with owning rental properties. For instance, they may be able to deduct certain expenses related to their rental properties, such as mortgage interest, property taxes, and repairs.

However, these deductions are subject to limitations and restrictions imposed by the government. Passive investors should consult with a tax professional or financial advisor to determine what deductions they are eligible for and how best to structure their investments for optimal tax benefits.

Tips for Successful Passive Real Estate Investing

Passive real estate capital investing is a great way to generate income without the hassle of managing properties. However, it is important to remember that collecting rent is a key aspect of successful passive real estate investing. To ensure a good return on investment, there are key questions that should be asked before buying a property.

One important question to ask is whether the property has a history of consistent rental income. This can be determined by reviewing the rental history and vacancy rates for the property. It is also important to consider the location of the property and whether it is in an area with high demand for rental properties.

Another key question to ask is whether there are any outstanding maintenance or repair issues with the property. These issues can impact both rental income and property value, so it’s important to address them before purchasing the property.

Developing a Solid Strategy: A Great Way to Make Money as a Passive Real Estate Capital Investor

Passive real estate capital investing can be a good way to make money, but it’s important to have a solid strategy in place. One effective strategy is to invest in properties that are likely to appreciate in value over time.

This can include properties located in up-and-coming neighborhoods or areas undergoing redevelopment. It’s also important to consider factors such as job growth and population growth when choosing where to invest.

Another effective strategy is to invest in properties that have multiple units, such as apartment buildings or duplexes. This allows for multiple streams of rental income and can help mitigate risks associated with vacancies or non-payment of rent.

Good Way to Generate Income Without Hassle

Passive real estate capital investing can be a good way to generate income without the hassle of managing properties. One effective way to do this is through real estate investment trusts (REITs).

REITs allow investors to pool their money together and invest in large-scale commercial properties such as office buildings, shopping centers, and apartment complexes. This allows for diversification of investments and can provide a steady stream of passive income.

Another option is to invest in turnkey rental properties. These are properties that have already been renovated and are ready to be rented out immediately. The property management company handles all aspects of managing the property, including finding tenants, collecting rent, and handling maintenance issues.

Is Passive Real Estate Capital Investing Right for You?

Passive real estate capital investing can be a great way to generate passive income and build long-term wealth. With the right approach, you can earn steady returns without having to actively manage your investments.

However, before jumping into passive real estate capital investing, it’s important to consider whether it’s the right fit for you. Here are some key factors to keep in mind:

Firstly, do you have the financial resources to invest in passive real estate? While there are many financing options available, such as crowdfunding platforms and private lenders, you’ll still need a significant amount of capital upfront.

Secondly, how much time and effort are you willing to put into researching and evaluating potential investment opportunities? While passive investing doesn’t require active management, it does require careful consideration of the risks and rewards associated with each opportunity.

Thirdly, what is your risk tolerance? Passive real estate involves some level of risk, such as fluctuations in property values or unexpected expenses. It’s important to evaluate your comfort level with these risks before making any investment decisions.

If you’ve carefully considered these factors and believe that passive real estate is right for you, then there are many opportunities available to get started. From multifamily properties in top markets to diversified portfolios across different asset classes, there are many ways to build a successful portfolio that generates steady returns over time.

Ultimately, the key to success in passive real estate investing is taking a thoughtful and strategic approach. By doing your research and carefully evaluating each opportunity that comes your way, you can build a strong foundation for long-term wealth generation through real estate investments.

Passive Real Estate Investment: The Advantages and Disadvantages of Remote Ownership

Real estate capital investing has long been a popular means of generating passive income. Traditionally, active real estate capital investing involved purchasing rental property or commercial real estate, managing tenants, and dealing with repairs and maintenance. However, with the rise of technology, remote ownership of rental property and storage units has become an increasingly popular form of passive real estate.

Passive real estate capital investment involves investing in real estate projects or properties without actively managing them. This type of investment allows investors to generate passive income without the hassle of managing tenants or properties. Instead, passive investors rely on third-party property managers or partners to manage the day-to-day operations of the real estate investment.

One popular form of passive real estate capital investment is income investments, which involve investing in real estate projects that generate a steady stream of income, such as rental properties or storage units. Rental property provides a reliable stream of passive income, while storage units provide a low-maintenance source of rental income.

Passive real estate allows investors to retain control over their investments while delegating the management of their properties to professional property managers or partners. Remote ownership of real estate allows investors to invest in properties located in other parts of the country or even overseas. This type of investment can be particularly attractive to investors who do not want to be involved in the day-to-day management of their investments, or who do not have the time or knowledge hands-on management requires.

However, there are also some disadvantages to passive real estate investment. One major disadvantage is the lack of control that passive investors have over the management of their properties. Passive investors must rely on their property managers or partners to make important decisions about the management of their properties, and may not always agree with the decisions made. Additionally, passive investors may be less familiar with the local real estate market and may not have the same level of knowledge about potential investment risks and opportunities.

Individual investors considering passive real estate investment should ask themselves several key questions before investing in this asset class. These questions include:

  • What is the expected return on investment (ROI) for this type of investment, and how does it compare to other investment opportunities?  How much due diligence should be done before investing in a specific property or project?  How much risk is involved in this type of investment, and what are the potential downsides?  How much control will I have over the management of my investment, and what kind of property management or partnership arrangement will be involved?  How will taxes and other financial considerations impact the returns on my investment?

What is the expected return on investment (ROI) for this type of investment, and how does it compare to other investment opportunities?

How much due diligence should be done before investing in a specific property or project?

How much risk is involved in this type of investment, and what are the potential downsides?

How much control will I have over the management of my investment, and what kind of property management or partnership arrangement will be involved?

How will taxes and other financial considerations impact the returns on my investment?

While passive real estate can provide investors with a steady stream of passive income, it is important to weigh the advantages and disadvantages before making an investment decision. Active real estate investing may be a better fit for some individual investors, while others may prefer the hands-off approach of passive real estate investment. Ultimately, individual investors should carefully consider their investment goals and risk tolerance before making a decision on the best investment strategy for them.

Passive real estate capital investment is becoming increasingly popular among investors looking for ways to generate passive income without the hassle of actively managing their investments. Passive real estate capital investors can choose from a variety of investment options, including residential rental property, storage units, and partnerships. Airbnb is also a popular choice for passive investors looking to invest in short-term rental properties. In addition to direct investments, passive investors can also invest in real estate investment trusts (REITs) or other real estate funds that provide exposure to a diversified portfolio of properties. Ultimately, the choice of investment will depend on the individual investor’s financial goals, risk tolerance, and investment horizon. However, passive real estate offers a low-maintenance way for investors to buy and hold real estate assets for the long term, while generating passive income and potential capital appreciation.

FAQ

  • How Can I Generate Additional Residual Income?  Establishing passive-income investments can be one effective way to generate additional residual income. You place your capital in a debt- or equity-structured investment — stocks, real estate, etc. — and enjoy a regular income stream from that investment. Because you make this capital investment only once, those regular payments are added directly to your residual income.  How does passive real estate work?With passive investing in real estate, you essentially hope to watch your money rise while someone else manages the properties. Of course, this doesn’t happen overnight, but it’s attainable with the right strategy and a little luck.  How much money do you need to start investing in real estate?  The amount of money you need to start real estate investing varies with the type of investing you want to get involved in. Buying a share in an REIT can be very affordable and is achievable for most investors. If you want to purchase an entire home to renovate and sell or rent out, you may need hundreds of thousands of dollars to finalize the deal.

How Can I Generate Additional Residual Income?

Establishing passive-income investments can be one effective way to generate additional residual income. You place your capital in a debt- or equity-structured investment — stocks, real estate, etc. — and enjoy a regular income stream from that investment. Because you make this capital investment only once, those regular payments are added directly to your residual income.

How does passive real estate work?

With passive investing in real estate, you essentially hope to watch your money rise while someone else manages the properties. Of course, this doesn’t happen overnight, but it’s attainable with the right strategy and a little luck.

How much money do you need to start investing in real estate?

The amount of money you need to start real estate investing varies with the type of investing you want to get involved in. Buying a share in an REIT can be very affordable and is achievable for most investors. If you want to purchase an entire home to renovate and sell or rent out, you may need hundreds of thousands of dollars to finalize the deal.

  • How to Get Started With Passive Real Estate Investing? There are several ways to add real estate to your investment portfolio while keeping things passive. Some methods require more capital and upfront work than others. However, the following strategies can all become completely passive or mostly passive investments.

How to Get Started With Passive Real Estate Investments?

There are several ways to add real estate to your investment portfolio while keeping things passive. Some methods require more capital and upfront work than others. However, the following strategies can all become completely passive or mostly passive investments.

  • What Are Some Additional Passive Income Ideas? If you are looking for other ways to passively invest in real estate, you can research publicly traded real estate companies and public Real Estate Investment Trusts (REITs). You might also want to investigate private REITs, which are not publicly traded on any stock exchange. Be aware, however, that private REITs are also not subject to the same financial disclosure rules as public REITs or other businesses traded on public exchanges.

What Are Some Additional Passive Income Ideas?

If you are looking for other ways to passively invest in real estate, you can research publicly traded real estate companies and public Real Estate Investment Trusts (REITs). You might also want to investigate private REITs, which are not publicly traded on any stock exchange. Be aware, however, that private REITs are also not subject to the same financial disclosure rules as public REITs or other businesses traded on public exchanges.

  • What Are the Risks of Passive Income Investing?  Of course, real estate investing also carries risks, just as investing in any asset class does. When you invest in any passive income asset, you carry the ongoing risk of the loss of your principal. In the case of both a stock or a REIT investment, this can result when the value of the investment goes down — either due to internal issues with the underlying asset (the company whose shares you’ve purchased, or the real estate portfolio of the REIT), or due to a general downturn in the market. In either case, the value of your asset can decrease.

What Are the Risks of Passive Income Capital Investing?

Of course, real estate investing also carries risks, just as investing in any asset class does. When you invest in any passive income asset, you carry the ongoing risk of the loss of your principal. In the case of both a stock or a REIT investment, this can result when the value of the investment goes down — either due to internal issues with the underlying asset (the company whose shares you’ve purchased, or the real estate portfolio of the REIT), or due to a general downturn in the market. In either case, the value of your asset can decrease.

  • What is a Passive Income Capital Investment? Passive income typically refers to an income stream that is somewhat automated. You make an upfront capital investment — often in a stock or mutual fund or other equity-based vehicle — and then receive an ownership stake in that investment, from which you are paid dividends or other types of regular income.

Passive income typically refers to an income stream that is somewhat automated. You make an upfront capital investment — often in a stock or mutual fund or other equity-based vehicle — and then receive an ownership stake in that investment, from which you are paid dividends or other types of regular income.

  • What is active real estate investing with passive management? Active real estate investing with passive management has some attributes of both active and passive investing. Researching and buying rental properties is an active investment activity. But if you hire a property manager, your ongoing role can be passive.

What is active real estate investing with passive management?

Active real estate investing with passive management has some attributes of both active and passive investing. Researching and buying rental properties is an active investment activity. But if you hire a property manager, your ongoing role can be passive.