How to stay on top of passive real estate investing

By nature, a passive property investment is a hands-off financial tool. Passive real estate investing can undoubtedly be an ideal solution for busy investors, whether you opt for online platforms or mutual funds. Yet some degree of attention can go a long way to keep your performance on track, so here are a few ways to stay organised.

Hamburg - From mutual funds to REITs, learn how to better manage your passive investments.

Online tools for passive real estate investing

Modern investments can be managed via online platforms. One example is Realty Shares, where investors can browse various real estate projects curated by a team of experts. You have the choice between funding equity investments or real estate loans, with the company managing the details. Another example of an online platform is Fundrise, which focuses on commercial property through electronic REITs (Real Estate Investment Trusts). The benefit of passive property investment tools like these is that you can put your money into crowdfunded opportunities without spending active time analysing properties and dealing with all associated paperwork.

With this type of investment, logging into the online platform regularly for updates is recommended. Track your returns over time to see if ROI is hitting intended targets, and update numbers on a quarterly basis. If returns aren’t measuring up, it may be better to look for more traditional investment tools.

Strategies for keeping track of REITs

A top option for those interested in passive real estate investing is a REIT, as mentioned earlier. These work in a similar way to mutual funds, encompassing ownership of commercial properties, land or other prospects. Diversifying assets minimises the risk for passive investors. This type of fund can be closely correlated to the stock exchange, with some types registered on the SEC, Nasdaq and NYSE. Like any traded asset, you should stay on top of market trends to keep abreast of your investment.

Schedule regular calls with your host or REIT manager. Listen carefully to what’s happening with your asset, taking notes regarding future opportunities and current performance. This allows you to make a more informed decision when the time comes to cash out. Although it may be tempting to wait until the next month or quarter to check in with investment managers, markets can shift quickly so it’s vital to put these discussions into your calendar.

Management options for traditional passive property investment

A third option for passive investors is to purchase traditional properties, leaving the day-to-day maintenance in the hands of a property management company. A bit more research is involved in this type of opportunity. Get started by perusing our property insights to hone in on strategic investments and find a reliable manager for your asset. Carefully compare property management fees to calculate your monthly cash flow and rate or return. Ideally, you will net a positive cash flow on a monthly basis after these expenses.

Ask for monthly or quarterly reports, and check these carefully for profit and loss statements. You should be able to see occupancy reports, cash flow statements and other details that can help you determine how well your investment is measuring up to intended targets.

Passive real estate investing offers a low-stress method of asset management, freeing you up for other professional endeavours. At the same time, quarterly check-ins are important to ensure that your capital is working for you.

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