Haryana, India, June 1, 2023 – Real estate investment platform Assetmonk today revealed the top 5 methods for investors to gain exposure to real estate appreciation without directly buying or owning physical property.
Investment in real estate is an excellent method to diversify one’s portfolio and vary income sources. However, not everyone is interested in purchasing and flipping properties to rent out or keeping properties and renters in good condition.
“For investors seeking real estate exposure, direct property ownership is not an absolute prerequisite. In fact, there are several options for investors to benefit from real estate price appreciation without having to deal with ongoing property management responsibilities,” said a spokesperson of Assetmonk.
If you’re seeking methods to real estate investments without the commitment or hassle of purchasing property, here are the top 5 options that provide consistent returns.
This investment vehicle provides investors the opportunity to acquire equity stakes in institutional-grade commercial real estate assets and participate in the potential upside of property ownership without the burdens of significant initial capital outlays or ongoing property management responsibilities. “This strategy works best for Grade-A commercial properties. An individual investor, unable to finance the entire property, can now do so. Individuals can invest in a stake in a property, get stable rental income, and build long-term wealth. Also, someone else handles the property for you,” the spokesperson added.
This strategy connects investors with real estate developers without requiring investors to purchase a property. “As an investor, you invest in real estate development projects and get equity and dividend benefits. Real estate crowdfunding used to have a higher barrier to entry, but these platforms are changing that scenario. Larger players in the crowdfunding space, like Fundrise, do not require accredited investors to use their platform,” the spokesperson noted.
Real Estate Investment Trusts allow investors to gain exposure to real estate without buying physical property. “REITs are companies that own, maintain, and operate real estate projects and profit from them. Many REITs trade publicly like stocks, allowing you to track their performance and share prices. They also typically offer higher dividends, making them an excellent choice for generating consistent income. There are many options in the REIT space, from industrial to data center to healthcare and more,” said the spokesperson.
For investors who do not want to own property, real estate structured debt is another option to consider. “They are a type of investment that combines the safety of debt investments with the stability of real estate. These provide financing to real estate developers or property owners in exchange for a guaranteed return. Real estate structured loans can be an excellent choice for those looking for short-term investments with steady, predictable returns. Also, the underlying real estate asset often backs these deals, providing extra security,” the spokesperson explained.
For investors with the means but wanting zero hassles of dealing with real estate flippers or landlords, peer-to-peer (P2P) lending is worth exploring. “Anyone can utilize such platforms built for P2P lending to lend money to real estate investors. They will use the borrowed money to renovate, flip or rehabilitate their own property. The loan is then repaid with interest, giving you passive income in a short period of time,” said the spokesperson.
In conclusion, strategic allocations to commercial real estate can serve as an effective means of enhancing portfolio diversification and generating additional sources of risk-adjusted returns for investors seeking to optimize the resilience and growth of their investment programs over the long term. However, not everyone wants the responsibility of buying and flipping properties to rent out or maintaining property and tenants. For those looking to invest in real estate without the commitment of purchasing property, the options above can provide comparable returns.
About Assetmonk
Assetmonk is a technology-enabled real estate investment management firm that provides accredited investors and institutions streamlined access to professionally-vetted commercial property assets as well as full-service portfolio administration and reporting capabilities. Via partnerships with major property aggregators and the backing of premier NBFCs, we provide handpicked investment-ready real estate properties to our clients. We handle all managerial, financial, and legal responsibilities on behalf of the investor, making real estate investments simplified and rewarding.
Assetmonk outlines five indirect investment strategies, including fractional ownership, real estate crowdfunding, REITs, structured debt, and P2P lending, that provide investors exposure to real estate returns without the responsibility of direct property ownership.
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