How to Invest in Real Estate Without Buying a Home

With a wide range of real estate investment options available today, investing in real estate has become accessible to investors of all budgets and time constraints. This article explores the various ways to invest in real estate without buying a home.

Whether you are a seasoned investor or just starting, there are options available that suit your financial goals and investment strategies. One such option is real estate syndication, where investors can leverage shares of multifamily rental properties to earn a passive monthly income.

At Life Bridge Capital, we offer investment partners the opportunity to participate in real estate syndication and earn a passive monthly income. Our team has extensive experience in real estate investing and can guide you through the process.

REITs and REIT ETFs

REITs are a beginner-friendly real estate investment option, as they are easy to buy and offer good returns. These companies own and operate income-producing real estate or real estate debt, and pay dividends to their shareholders. To maintain their tax-advantaged status, REITs must distribute at least 90 percent of their taxable income as dividends.

While REITs have historically produced higher returns than the stock market, they are not fail-proof. However, they do provide an easy way to diversify a portfolio, as each REIT specializes in a specific type of property, and investing in multiple REITs provides exposure to different real estate sectors.

Investors can buy publicly traded REIT shares or invest in privately traded ones. Alternatively, REIT exchange-traded funds are a good option, as they are professionally managed funds that invest in multiple REITs, reducing the need for individual research.

Real Estate Syndications

Real estate syndications offer investors the best potential for their money and without the effort of directly owning a home. Syndications are real estate companies that source at least some of their funding from equity investors called limited partners. Then, those limited partners earn a share of the project profits. 

Limited partners contribute capital but are truly passive investors without the responsibility of managing the property or making decisions. Those duties, and many others, fall on the sponsor.

The project sponsor finds the subject property, executes the transaction, oversees the property operations, and then handles the termination of the project, which happens upon the sell of the property. In turn, limited partners receive the return of their capital plus, ideally, additional returns as the property makes money. 

Syndications usually require long-term capital commitment and will have minimum investments ranging from $50,000 and up. 

Land Ownership

Investing in rental property can be complicated, but investing in land offers a direct ownership option without the burden of maintaining structures. Land ownership takes various forms, such as buying agricultural land to lease for steady rental income, purchasing land with mineral rights to collect royalties, or simply holding onto land as a safe investment vehicle that hedges against inflation.

For investors who can accurately predict the future desirability of an area, buying land and holding onto it can be a lucrative investment. However, it’s important to note that investing in land also comes with its own set of risks and challenges, such as zoning restrictions, environmental concerns, and the possibility of the land losing value due to unforeseen circumstances.

Crowdfunding

Crowdfunding has emerged as a real estate investment option due to advancements in technology. This innovative approach allows real estate developers to connect with investors directly. It offers an excellent opportunity for new property owners who lack established credit to kick-start their first projects. Additionally, crowdfunding bridges the gap for potential investors who can’t afford to participate in syndications, making it a mutually beneficial arrangement for all parties involved.

Partner with an Active Investor

For investors with significant capital but no interest in being a landlord, teaming up with an active investor can be an ideal solution. The managing partner assumes the responsibility of making decisions and executing the business plan, which is similar to the role of a project sponsor in a syndication. However, the decision-making process may involve a team effort in some partnerships, depending on the agreement between the parties involved.

Final Thoughts

The real estate industry greatly benefits from the participation of passive investors, who provide crucial funding for projects of varying sizes and types. As a part of my personal coaching program, I can assist you in identifying the ideal real estate investment path based on your objectives.

Onbridge Capital is a prominent real estate syndication firm that grants investment partners the chance to convert their portions of multifamily rental properties into a passive source of monthly revenue.