How to Become a Hands-Free Real Estate Investor

Real estate is usually considered a fairly hands-on investment option. Even if the intent is to rent it out, buying property requires a lot of time and money. If you have a passion for real estate but can’t make those kinds of investments, that just means you should learn how to become a hands-free real estate investor.

Renting property is often incredibly lucrative, so savvy investors have discovered and engineered ways to make real estate a hands-free opportunity. Use these tips to explore the world of real estate without requiring too much time or a significant budget.

Invest in Real Estate Investment Trusts

One of the easiest ways to stay hands-free while still taking advantage of the lucrative real estate market is to invest in related funds rather than buying property directly. There are many options out there, but they all tend to fall under the blanket of real estate investment trusts (REITs).

These trusts give investors the ability to generate income in the real estate market without ever buying property. There are three different types of REITs you can invest in remotely:

• Equity
• Mortgage
• Hybrid

If the first REIT options aren’t for you, the hybrid trust provides a combination of the two. These are all viable options, depending on the investor’s means and needs. 

Get Involved in the Construction Market

Real estate investment isn’t just about rental properties and vacation homes. There’s also the potential for profit when laying a foundation — sometimes literally. 

Consider investing in the construction sector rather than in properties directly. Buying stock in homebuilders or companies that focus on public infrastructure can provide a significant return on investment over time.

People will always need new construction and renovations to existing structures. If you invest in this market and your business experiences significant growth, you don’t have to handle newfound success alone. Outsourcing companies can offer relative consulting or advisory support so you know how to modify your staff or take a second look at your portfolio.

As with all forms of investment, there is always a risk. The construction and housing markets tend to wax and wane throughout the years. However, it’s a viable option for anyone looking to get involved with real estate investing without purchasing property.

Outsource or Automate as Much as Possible

Buying rental property doesn’t always mean investors need to get their hands dirty. There are plenty of tools available to support both outsourcing and automation when it comes to property management. Consider backing a property management company that will allow outsourcing. This leaves the investor in charge of the big decisions, but property managers or intermediaries handle the day-to-day operations. 

Automation can save a lot of time and keep the investor from intervening directly. Your property will receive rental payments or non-emergency maintenance and repair requests without requiring your constant supervision.

Screen Tenants Thoroughly

Screening tenants might seem like an expensive waste of time, but it can save real estate investors in the long run and make it easier to stay hands-off. A thorough tenant screening ensures reliable rent payment and will reduce the chance of ending up with a problem tenant. 

Guaranteeing reliable tenants also reduces turnover rates. If you choose to invest in a vacation rental or an apartment community, long-term renters become a constant revenue source that provides funding for property updates and necessary repairs.

Taking the time to carry out thorough background and credit checks is one of the most important things for an investor to do, especially if they’re trying to be as hands-off as possible. Unproblematic tenants are a bit of a unicorn when it comes to real estate investments, but they are out there. It’s just a matter of taking the time to find them.

Becoming a Passive Real Estate Pro

Becoming a real estate investor doesn’t always mean individuals need to get their hands dirty or be involved in every aspect of the process. It’s entirely possible to take advantage of the lucrative real estate market without ever buying a single acre of property. Those who decide to purchase rental properties can turn to outsourcing and automation to create an entirely hands-free experience. 

For anyone who’s been hesitant to invest in real estate because they didn’t want to learn the ins and outs of landlord-tenant law, there’s no better time to get involved. 

Holly Welles is a real estate writer who covers the latest market trends in everything from residential to commercial spaces. She is the editor behind her own blog, The Estate Update, and curates more advice on Twitter.