Active vs Passive Investing: Which Is Best for You?
Updated: Jan 18, 2022
Investing in real estate is a profitable endeavor. As an investor, you will get to enjoy monthly cash flows, property value appreciation, tax benefits, and more. To get started in multifamily investment in Houston, Texas, you must decide first which investing strategy is the best option for you.
Active and passive investments are the two strategies that investors must choose from. With active real estate investing, investors purchase and manage properties directly. Passive multifamily real estate investing, on the other hand, involves making real estate investments without actively participating in the management of the property.
Both of these multifamily real estate investment strategies can be lucrative. Deciding which strategy is best for you as an investor requires an assessment of your priorities, among other factors. Here are a few questions you should ask yourself to help you decide.
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How much time can you spend?
Managing multi-dwelling units is extremely time-consuming. If you choose to be an active investor, you must dedicate the majority of your time to the management process. If you are a busy professional or a business owner, passive investment in Texas may be the better option for you.
How much risk can you handle?
As with any direct investment, active real estate investment carries more risk than passive real estate investing. If you feel that you lack the necessary experience and knowledge in overseeing real estate activities, it would be financially safer to choose passive investment instead.
How much financial return are you expecting?
With active investment, you must calculate potential returns ahead of time so you can decide if the investment is profitable or not. If you don’t know how to do this, Makaan Investment Group can help you get started with passive investment. Call us today.