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Abstract

lities people tend to believe about being a landlord.</p><ul><li>The first is that you’ll simply sit back, collect rent and never really do much work.</li><li>The second is that you’ll be constantly getting calls at four o’clock in the morning to fix leaky toilets.</li></ul><p id="9073">To use a cliche, the truth is somewhere in the middle.</p><p id="159d">Being a landlord and owning physical Real Estate is not as simple as sitting back and collecting rent checks at the first of every month. You have to find and screen tenants, arrange for maintenance and repairs, make sure all the bills are paid and do the nasty business of evicting people when necessary.</p><p id="62d6">Yes, you can hire a property manager to help with these tasks. But it does not absolve you of doing any work.</p><p id="02c5">On the other hand, if you are wise enough to hire a good property manager, you can avoid the nightmare scenario of getting that call at four o’clock in the morning to fix that leaky toilet. You are paying the property manager to take that call in the middle of the night.</p><h2 id="3533">Real Estate Investing Requires a lot of Cash</h2><p id="f970">To buy an investment property you typically need a down payment equal to at least 20% of the purchase price of the property. So even if you were lucky enough to find an investment property for $100,000 you would still need$ 20,000 upfront plus more money to cover the lawyer fees and other closing costs.</p><p id="3216">Then you need to get an $80,000 mortgage and start making monthly payments. You will also want to have a good pot of money set aside to cover things like</p><ul><li>general maintenance,</li><li>repairs from damage</li><li>The possibility of the furnace or AC dying</li><li>Tenants not paying their rent (you still need to pay the mortgage)</li><li>Time in between new tenants when the property is vacant (you still need to pay the mortgage)</li><li>Property taxes</li><li>Homeowner Association or condo fees</li><li>Property manager fees (if you hire one)</li></ul><p id="568a">There is no way around it, if you want to invest in Real Estate you need a lot of cash.</p><p id="e16d">Or do you?</p><h2 id="8475">How to Invest in Real Estate Withing Being a Landlord and With Less Than$ 100</h2><p id="7663">Yes, it is possible to invest in Real Estate without owning physical Real Estate. You can invest in what is called a Real Estate Investment Trust (REIT)</p><p id="f788"><b>REIT’s are compani

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es that professionally invest in Real Estate</b>. REIT’s invest in a variety of Real Estate projects that most regular people would not have the capital to invest in such as:</p><ul><li>Large apartment complexes</li><li>Office buildings</li><li>Healthcare facilities</li><li>Retirement facilities</li><li>Shopping malls</li><li>Industrial buildings</li></ul><p id="d909">Investors can purchase shares in REITs the same way you would purchase a share of Amazon, through the stock exchange. Like stocks, REITs have seen incredible returns over the past ten years. Since the market bottomed out in 2009, Vanguards Real Estate ETF (think of it like an Index Fund for Real Estate) is up nearly 300% as I write these words.</p><p id="7f01">The one big advantage that REITs have over traditional stocks is the massive amount of cash they pay out to their shareholders through monthly or quarterly <a href="https://readmedium.com/what-is-a-dividend-89df9c4a7060">dividends</a>. <b>REITs are required by law to payout 90% of their taxable income in the form of shareholder dividends each year</b>.</p><p id="875d">So the way you make money with REITs is as simple as Real Estate Itself. REITs buy Real Estate, they charge tenants rent, they pay that rent back to investors through dividends. Some REIT’s can have yields over 10%. Meaning if you invested $100, you would get back$ 10 per year in dividends.</p><p id="59ee"><b>For less than $100 you can buy a REIT and legitimately tell people you invest in Real Estate without having to be a landlord.</b></p><h1 id="665e">Join the Community</h1><p id="85e8">Become a Millionaire In The Making and <b>join the <a href="https://dogged-mover-9757.ck.page/e585f0d0e7">30-day money challenge</a>.</b></p><ul><li>Each day you’ll get an action item related to your finances. It might be small or it might be big.</li><li>But each day you are going to take at least one action that will help you move forward with your financial goals.</li><li>You’ll get the support of the Millionaires In The Making Community: A private place to share your struggles and success with people in the same boat as you.</li></ul><h2 id="fb4d">Click here to Sign up for the 30-day money challenge</h2><p id="caa4"><i>This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.</i></p></article></body>

Investing in Real Estate Without Being a Landlord

When people find out I write about personal finance, there is one topic everybody wants to discuss, Real Estate. Everybody seems to love investing in Real Estate, or at least they love the idea of investing in Real Estate. These conversations start out with the person telling me all the reasons it’s amazing to invest in Real Estate. Naturally my follow up is to ask, how many properties they’ve invested in. Then they sheepishly admit they haven’t actually invested in any Real Estate, yet. But they plan on it.

There is a very good reason people are drawn to the idea of Real Estate investing: They understand how it works. A lot of people shy away from investing in the stock market because they don’t really understand how it works and find it very intimidating.

Real Estate is very easy to understand. I own a property, I find people to live in it, they give me money. Sign me up for that!

In addition to its simplicity, Real Estate has been glamorized in our culture (Thanks HGTV). While I am not a fan of the tendency to “overhype” Real Estate investing, there is no denying that very smart, hard-working people have used Real Estate to make themselves wealthy and build the life they always wanted.

So we get why people are attracted to Real Estate. Then why don’t more people actually invest in Real Estate?

It does not take a rocket scientist to figure out why most people who claim to love Real Estate have not invested In Real Estate.

They are scared of being a landlord and
It takes a ton of money to invest in Real Estate

Being a Landlord

There are two realities people tend to believe about being a landlord.

The first is that you’ll simply sit back, collect rent and never really do much work.
The second is that you’ll be constantly getting calls at four o’clock in the morning to fix leaky toilets.

To use a cliche, the truth is somewhere in the middle.

Being a landlord and owning physical Real Estate is not as simple as sitting back and collecting rent checks at the first of every month. You have to find and screen tenants, arrange for maintenance and repairs, make sure all the bills are paid and do the nasty business of evicting people when necessary.

Yes, you can hire a property manager to help with these tasks. But it does not absolve you of doing any work.

On the other hand, if you are wise enough to hire a good property manager, you can avoid the nightmare scenario of getting that call at four o’clock in the morning to fix that leaky toilet. You are paying the property manager to take that call in the middle of the night.

Real Estate Investing Requires a lot of Cash

To buy an investment property you typically need a down payment equal to at least 20% of the purchase price of the property. So even if you were lucky enough to find an investment property for $100,000 you would still need $20,000 upfront plus more money to cover the lawyer fees and other closing costs.

Then you need to get an $80,000 mortgage and start making monthly payments. You will also want to have a good pot of money set aside to cover things like

general maintenance,
repairs from damage
The possibility of the furnace or AC dying
Tenants not paying their rent (you still need to pay the mortgage)
Time in between new tenants when the property is vacant (you still need to pay the mortgage)
Property taxes
Homeowner Association or condo fees
Property manager fees (if you hire one)

There is no way around it, if you want to invest in Real Estate you need a lot of cash.

Or do you?

How to Invest in Real Estate Withing Being a Landlord and With Less Than $100

Yes, it is possible to invest in Real Estate without owning physical Real Estate. You can invest in what is called a Real Estate Investment Trust (REIT)

REIT’s are companies that professionally invest in Real Estate. REIT’s invest in a variety of Real Estate projects that most regular people would not have the capital to invest in such as:

Large apartment complexes
Office buildings
Healthcare facilities
Retirement facilities
Shopping malls
Industrial buildings

Investors can purchase shares in REITs the same way you would purchase a share of Amazon, through the stock exchange. Like stocks, REITs have seen incredible returns over the past ten years. Since the market bottomed out in 2009, Vanguards Real Estate ETF (think of it like an Index Fund for Real Estate) is up nearly 300% as I write these words.

The one big advantage that REITs have over traditional stocks is the massive amount of cash they pay out to their shareholders through monthly or quarterly dividends. REITs are required by law to payout 90% of their taxable income in the form of shareholder dividends each year.

So the way you make money with REITs is as simple as Real Estate Itself. REITs buy Real Estate, they charge tenants rent, they pay that rent back to investors through dividends. Some REIT’s can have yields over 10%. Meaning if you invested $100, you would get back $10 per year in dividends.

For less than $100 you can buy a REIT and legitimately tell people you invest in Real Estate without having to be a landlord.

Join the Community

Become a Millionaire In The Making and join the 30-day money challenge.

Each day you’ll get an action item related to your finances. It might be small or it might be big.
But each day you are going to take at least one action that will help you move forward with your financial goals.
You’ll get the support of the Millionaires In The Making Community: A private place to share your struggles and success with people in the same boat as you.

Click here to Sign up for the 30-day money challenge

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.