How to Invest in Real Estate Without Owning Property
If you’re interested in investing in real estate but don’t have much cash to spare, there are still plenty of viable options. We’ll cover some popular ways to get involved, such as investing in REITs, ETFs and targeted mutual funds.
Crowdfunding platforms such as Fundrise and Realty Mogul provide investors with a way to invest in real estate without owning their own property. However, these investments carry greater risk than other strategies, so be sure to do your due diligence.
Real estate investment trusts
One popular way to invest in real estate without owning property is through shares in a real estate investment trust. These are mutual funds that invest exclusively in property instead of stocks.
REITs are an ideal way for investors to purchase shares in real estate that pay dividends to shareholders. Furthermore, they’re suitable for beginners who don’t want to invest a substantial amount of capital.
Another way to invest in real estate is through a real estate-focused exchange-traded fund (ETF). These funds offer broad diversification at low costs over the long run, similar to index funds and mutual funds.
A REIT is a company that owns and manages real estate as well as other assets, like mortgage bonds. It must adhere to stringent rules and regulations, paying out at least 90% of its profits in dividends to shareholders.
Real estate funds
Real estate funds offer an exciting way to invest in property without owning it directly. They pool money from investors and invest it across multiple properties, typically residential and commercial.
Another alternative is investing in individual companies that own and manage real estate. This may be an advantageous choice if you have the time to research and do due diligence on the company.
These types of investments often have lower entry-level costs than purchasing individual properties, making them a viable choice for those with limited cash reserves to get started.
One major advantage of investing in a real estate fund is that you gain access to an experienced manager. This frees up time for other aspects of your portfolio while leaving fund management up to someone else.
Real estate ETFs
Real estate can be a fantastic wealth-creating asset for those seeking to increase their income or save for retirement. Additionally, it provides an opportunity to diversify your portfolio.
If you don’t have the time or resources to purchase a real estate property yourself, investing in a real estate fund may be your solution. These funds pool money from investors and invest it across several properties.
Real estate ETFs come in many varieties, such as sector ETFs and global ETFs. You can select the one that best meets your objectives and budget.
Vanguard’s REIT ETF, for instance, is a comprehensive real estate fund that tracks the five largest REITs in America. With its low expense ratio and wide range of property types such as industrial, communications infrastructure and data centers, this ETF ensures investors keep more of their profits. Furthermore, its top 10 holdings make up 61% of its portfolio.
Online real estate
Investing in real estate can be a lucrative way to build wealth, but for some people it may prove challenging due to lack of funds, concerns about investing too much risk or simply not knowing where to begin.
One way to invest in real estate without owning property is through a Real Estate Investment Trust (REIT). REITs are companies that pool investor money together and purchase and manage properties.
Many investors use REITs to diversify their portfolios and generate cash flow and capital appreciation by purchasing shares in these companies.
Some online platforms connect investors with REITs and real estate projects, such as Fundrise and Realty Mogul.
These platforms may not be suitable for everyone, but they do provide the opportunity to purchase shares in real estate and gain access to a range of opportunities across Canada.
Are you searching for a low-risk, high-return real estate investment strategy? Consider online real estate investing. There are various REITs, real estate syndication funds, hard money loans and other strategies available to help meet your objectives.