Manila, Philippines

Is It Possible to Invest in Real Estate Without Buying a Property?

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One of the easiest ways to build yourself financially is by investing in real estate. Not only is it a good source of passive income, but it can also increase your money’s value over time. But what if you want to build wealth through real estate without actually owning property? Can it be done? Yes, it can! Read on below to find out how.

Join a Real Estate Investment Group

A real estate investment group is sort of like a mutual fund for rental properties. It goes like this: A company builds or buys real estate, and then sells them to investors as rental properties. Would-be investors, in turn, become members of the group by acquiring one or more units. Property management, however, still falls on the company’s shoulders; it’s their responsibility to take care of maintenance, showcase vacant units, and interview potential tenants. In exchange for their services, they get a cut of the monthly rent.

Buy and Sell REITs

REITs or Real Estate Investment Trusts are created when a corporation uses its investors’ money to acquire income-generating properties. Like stocks and bonds, you can buy and sell shares of REITs in several exchanges, and the corporation who created it is obligated to pay out up to 90% of its taxable profits to investors as dividends. By doing this, they get to keep their status as a REIT, and they get to avoid paying corporate income tax.

Invest in a Real Estate Company

Buy stocks from a real estate company (e.g. SM Prime (SMPH), Ayala Land (ALI), etc). Further, there are many companies out there that don’t operate as REITs, instead focusing on building or managing properties before renting or selling them for a profit. These include hotels and resorts, timeshare companies, real estate developers. For example, Tagaytay Highlands is a Philippine-based company that specializes in developing high-scale real estate properties in one of the most prominent cities of the country. The only downsides to this option are that you need to go an extra mile to find them and that they tend to pay lower dividends than REITs.


Flip Some Houses Over

There are two kinds of investors: the buy-and-hold investor and the day trader. House flipping is the closest you can get to be a day trader in the real estate industry. You buy a property at a cheap cost and then profit from it by selling it for a higher price. One of the benefits this technique offers is that you can quickly realize your gains in a relatively short period. It also ties up your capital for a shorter time span, allowing you to invest in other endeavors sooner. However, real estate trading can incur additional costs, with the process alone demanding a lot of money. Moreover, the quick turnaround of properties tends to create income swings that can increase taxes, especially if the process is too speedy. Thus, house flipping should be considered more as a tactical strategy than a long-term plan.

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Do Your Homework

Whether you’re buying yourself a new home in one of the most luxurious locales in the world or just simply getting a condo with the intention of renting it out to tenants, you can almost never go wrong with investing on real estate. All you need to do is do a lot of research on the property you want and to plan your purchase wisely.

Real estate is just one of the many investments that Juan can build in his journey towards financial freedom. Download the #10Steps to a Richer Life to know more about the many safe investments you can consider, and learn why WISER PINOY = RICHER PINOY.


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Author’s Bio:

Edwin Deponte is a motivational writer who is also passionate about Digital Marketing. He believes in others’ abilities and tends to bring out people’s hidden potentials through his words of inspirations and motivational articles.

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