Investing in Rental Properties for Beginners

Real estate investing covers a much broader spectrum of investment vehicles than most people realize. This spectrum ranges from the very passive strategy of buying real estate-related stocks on a public exchange, investing in Real Estate Investment Trusts (REITs) or even investing in deals through a real estate crowdfunding platform, to the more active approach of purchasing individual properties directly — either to resell them for profit, or to rent them out for ongoing income.

Contrary to much of the conventional wisdom and many real estate books and courses, investing in rental properties is not a strategy for earning passive income. In fact, it is among the most active and time-consuming forms of real estate investing in which you can engage.

In the sections that follow, we will discuss the basics of investing in rental properties, including an overview of how to find a viable rental property and obtain financing for it, what may be involved in operating and maintaining the property, and the basic pros and cons of such investments. We also suggest a real estate investment approach that can serve as a possible alternative, should you find that direct investing in rental properties process is not right for you.