The power of passive real estate investing

Imagine you purchased a rental property. Don’t be surprised if you get a phone call at 2AM from one your tenants stating that the pipes froze and started leaking. Needless to say, this needs to be fixed immediately. The property is 1 ½ hours away from your house, and your plumber just left for vacation. Guess who’s going to dress warmly (because it is 12 degrees Fahrenheit outside) and drive to the rental property to try and fix the pipes? You got it; you or your partner in crime, aka your spouse or partner.

Now imagine a polar opposite scenario, in which you invested into an apartment building syndication. Figure that the money you had invested along with the dividends are rolling into your account on a regular basis each quarter. If the partnership does things correctly, the apartments will be gradually renovated to attract higher-paying tenants, such as replacing Formica counter-tops with marble or quartz and upgrading kitchen appliances to stainless steel. What comes next is that after about two or three years, when the apartment building value appreciated and the building has been re-appraised, you receive a portion of your equity money back, and the dividends based on your initial investment continue to stream into your bank account.

How cool is that?! That’s a rhetorical question because that’s pretty awesome!

The cherry on top of the cake is that when the building is finally sold, figure around five to ten years, you, as an equity owner will receive the final portion of the proceeds aka capital gain based on your initial contribution. The bottom line is that you watch the money grow while you’re not directly responsible for issues related to managing the property.

That wasn’t so tough, right?

So, talk these scenarios over with your spouse or partner and try to objectively decide which you would choose: joining as an equity partner in apartment building syndication or buying yourself a single family house?