Active vs Passive Real Estate Investing

Before looking at apartment deals or general partners, it’s important to know yourself, what type of role you’d like to have in the investment and what your goals are. This starts by determining if you want to be a passive or active apartment investor.

To determine if passive investing is the ideal strategy for you, answer YES or NO to the following three questions:

1. Are you busy with your full-time job and other activities but still want to invest in apartments?

2. Do you want to receive the benefits of owning a large apartment building but you don’t have the capital and/or expertise to acquire one by yourself?

3. Are you comfortable with someone making business decisions on your behalf?

If you answered “YES” to these three questions, passively investing in apartment syndication would align with your investment goals.

Is Passive Real Estate Investing Really Possible?

Few investments have created as much wealth as real estate. Investment in land and property seems to be the only true constant across the history of investing and wealth building, but is truly passive income from real estate investing possible?

If you answered “no” to the first two questions, passive investing may still be the route for you, because you require an educational foundation and past real estate or business expertise prior to becoming an active apartment investor. But if you answered “no” to the third question, you shouldn’t be a passive investor, because the general partner and their team have 100% control over the business plan.

If you answered “yes” to these three questions but your goal is to eventually become an active apartment investor, passively investing in a few deals can help you bridge the gap from where you’re at to where you want to be from a time commitment, expertise and experience perspective.

You will learn the apartment acquisition, management and disposition process in addition to having your involvement in apartment deals on your resume, which will be helpful when speaking to brokers and lenders when you transition to active investing.

If you have no desire to ever be an active investor and you like your full-time job or want to enjoy your retirement, passive investing is for you.