Let’s start by saying that you can certainly do this. Most real estate investing will have you taking a landlord role in some way, however. There are a couple ways, but first you need to evaluate why you might not want to be a landlord.
Why Don’t You Want to Be a Landlord?
Being a landlord can be a good thing. The best landlords provide quiet, safe, comfortable homes for reasonable rents. They help fix problems that arise. They are responsive. They are present, but not intrusive. They are aware of the issues their tenants have and help when they can. They have clear rules that are agreed upon by all. Who wouldn’t want to be this landlord? Or their tenant?
Perhaps you are worried because of the horror stories you have heard about the toilet backing up at 3AM. Unfortunately, there always will be toilets. Pay someone to fix it. Get a good property manager.
Perhaps you are worried you’ll become part of a group of scheming, greedy, selfish landowners who want to squeeze every last penny out of their properties while the tenants suffer. If you philosophically have an opposition to being a landlord there’s no way I’ll change it. But there are ways to invest without becoming an evil landlord.
- Don’t be evil. I say this tongue-in-cheek. Good landlords exist and you can be one. Show the world why you are different.
- Become a flipper. Buy houses. Fix them, and sell them for a profit. Some don’t consider this investing, more of a job. You be the judge.
- Become a wholesaler. Buy houses and immediately sell them to a buyer you have already lined up. Make a tidy profit on each. Same as flipping, some don’t consider this investing. You don’t care about what they think.
- Invest in Real Estate Investment Trusts (REITs). REITs usually have securities traded on the stock market and you can buy them through your favorite broker. Just be aware that the REIT is probably doing landlording or paying someone to do so, which you might think makes you a landlord by association.
- Develop land. This takes a lot of expertise and money so isn’t best for starters. It is a way to put money into a piece of land and then sell pieces of it or houses on those pieces later for a large return.
- Become an investor in a syndication. This takes away all the landlording with still having a significant investment return. The syndicator is very likely acting as a landlord so, as in a REIT, you are just landlording downstream.
There are probably plenty of other ways to invest without becoming a landlord. Let me know which I missed.