1. The Pros and Cons
of Active vs. Passive
Real Estate Investing
2. Many real estate investors are
turned off by investment
strategies due to the time
commitment involved. Others
are attracted to the hands-on aspect of managing
properties and realizing the profits that owning
investment properties can generate. Knowing
whether you are an active or passive real estate
investor is one of the first things you should
establish before moving forward.
3. Active investing takes additional time and
energy on the part of the investor. Active
ownership often means financing, buying and
managing real estate assets. The investor is both
financially and personally linked to the
investment property. The investor not only
realizes the value of his or her investment dollar,
but also the value of the sweat equity put into
the investment property over time. Many active
investors are able to replace an existing income
from the returns of their investment properties.
4. Passive investing can be realized in many ways,
including via real estate investment trusts and
limited partnerships. Passive investments
require less time and energy on the part of the
real estate investor. This allows an investor to
have a more hands-off approach. Passive
investors are not subject to the same financial
and time commitments associated with being an
active investor.
5. As a real estate investor you
need to decide how active a
role you want to take in your
investment. Active investors
can often realize greater profits due to their
direct control over the investment, while passive
investors are not submitted to the rigors of
maintaining a property and dealing with tenants
or financial institutions.
