Passive investing in real estate is a good option for most people. After all, you don’t want to have 100% of your investments in the stock market. However it’s important to consider several factors to determine if it’s the right fit for you. Here are the top 5 things to consider:

Investment Goals: Clarify your financial objectives and determine if it aligns with them. Are you seeking long-term wealth accumulation, steady cash flow, diversification or a combination of these? Passive real estate investments can provide income and appreciation, but it’s essential to ensure they align with your goals.

Risk Tolerance: Evaluate your risk tolerance level. While real estate generally offers stability and potential returns, like most all investments, there are still risks involved, such as market fluctuations, property management challenges, or unexpected expenses. Assess your comfort level with these factors.

Capital Commitment: Determine how much money you have available to invest. Passive real estate investing typically requires a significant upfront investment and your funds can be committed for up to six years. 

Diversification: Analyze your overall investment portfolio and consider whether adding real estate investments would provide diversification benefits. It can act as a hedge against stock market volatility and offer potential stability in your investment portfolio.

Tax Implications: Understand the tax implications associated with passive real estate investments. It may offer tax advantages such as depreciation, deductions, or 1031 exchanges. Consult with your tax professional to determine potential tax benefits specific to you.

It’s crucial to conduct thorough research, seek advice from professionals, and consider these factors before committing to invest. Each individual’s financial situation and preferences are unique, so understanding your financial goals will help determine if it’s right for you.