What Is Passive Real Estate Investing?

Passive real estate investing does not require you to manage the properties you put your capital into. One of the best ways to do passive real estate investing is to put your money in REITs. You put your money in REITs and let them garner returns for you by managing a portfolio of money-making properties.

To efficiently invest passively in real estate, it is important to know how to select the right REIT to invest into. Nonetheless, to help you with the same, here are 2 ways to identify a good REIT to invest into -

1.       Higher returns than their public counterparts

Regardless of which type of private REITs you decide to invest in, the good ones have a track record of providing higher returns when compared to their exact public counterparts. While private REITs are able to provide their investors with a minimum of 7% to 8% returns on their invested capital amount, public REITs are able to reach the bar of 5% to 6% returns on an average comparatively.

2.       Higher returns than their public counterparts

Since private REITs are not listed on the public indices, they are not affected by the fluctuations that happen in the public market and are one of the best ways to gauge the potential and strength of the real estate industry at any given point. The avalanche effect of the public markets is also easily avoided, wherein, when one of the major players of a certain industry has a falling stock price, the share price of their competitors in the same industry also starts to drop. Since private REITs are not connected to each other and their income solely depends on their own performance, the returns they provide have infrequent updates when compared to their public counterparts.

Please Read The Original Post Here: What Is Passive Real Estate Investing?

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