Passive Real Estate Investing

Updated

06/11/2026

Contents

Key Takeaways

Passive real estate investing allows individuals to invest in real estate assets without directly managing the properties.
REITs are a common way to engage in passive real estate investing.
Investors buy shares in a company that owns and operates income-generating properties and receive income and potential appreciation without operational responsibilities.

What is passive real estate investing?

Passive real estate investing enables investors to earn income from real estate without the responsibilities of property management, such as tenant interactions, maintenance, and upkeep. Unlike active real estate investing, it requires minimal time and operational involvement.

How do you invest in real estate for passive income?

Purchasing shares in publicly traded REITs is one of the easiest ways to start investing in real estate. Investors can buy and sell REIT shares on stock exchanges, which provides them with liquidity. Learn more on the How to Invest in Real Estate Investment Trusts (REITs) page.

Why is real estate investment important for portfolio diversification?

Passive real estate investments can diversify a portfolio because real estate has historically shown low correlation with stocks and bonds. Adding real estate to an investment portfolio can help reduce total portfolio volatility and may provide steady dividends. Learn more in this Morningstar analysis available in Nareit's Quick Facts Guide.

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What's a REIT?

REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.

Why Invest in REITs

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns. These are the characteristics of real estate investment.

About Nareit

Nareit serves as the worldwide representative voice for REITs and real estate companies with an interest in U.S. real estate. Nareit’s members are REITs and other real estate companies throughout the world that own, operate, and finance income-producing real estate, as well as those firms and individuals who advise, study, and service those businesses.