Not everyone wants to be a landlord. Dealing with broken toilets, late rent, and constant maintenance calls isn’t for everyone. But real estate is still one of the best ways to build long-term wealth. So what’s the solution?

Enter passive real estate investing.

In this post, we’ll look at the best passive real estate investment options for 2025. We’ll break down how they work, the pros and cons, and how to get started—even if you’re not a real estate expert.

What Is Passive Real Estate Investing?

Passive real estate investing means earning money from property without actively managing it. You don’t have to deal with tenants, fix problems, or handle day-to-day tasks. You simply invest your money and let someone else do the work.

This is perfect for people who want the benefits of real estate—steady income, appreciation, and tax advantages—without the time or stress of managing properties themselves.

Why Go Passive?

Here’s why passive investing is gaining popularity:

• Time-Saving: You don’t have to manage tenants or maintain buildings.

• Low Stress: Professionals handle the tough stuff.

• Diversification: You can invest in multiple markets or property types.

• Steady Income: Many options offer monthly or quarterly payouts.

• Scalability: Easier to grow a portfolio when you’re not tied to daily management.

But not all passive options are created equal. Let’s explore the best choices available now.

1. Real Estate Investment Trusts (REITs)

REITs are one of the most common ways to invest passively in real estate. These are companies that own or finance income-producing properties, like apartments, office buildings, or shopping centers.

You can buy shares of a REIT just like a stock. When the REIT earns money, it pays dividends to investors.

Pros:

• Easy to buy and sell

• Low minimum investment

• Diversified exposure

• Regulated and transparent

Cons:

• Subject to market swings

• Less control over specific assets

• Dividends are taxed as ordinary income

Best for: New investors or those looking for liquidity and simplicity.

2. Real Estate Crowdfunding Platforms

Crowdfunding lets multiple investors pool money to buy real estate projects. You invest through online platforms like Fundrise, RealtyMogul, or Crowdstreet.

These platforms offer access to both debt (loans) and equity (ownership) deals in residential or commercial real estate.

Pros:

• Low minimums (some as low as $10)

• Wide range of property types

• Passive income from rents or interest

• Professionally managed

Cons:

• Limited liquidity (you may be locked in for years)

• Platform fees

• Risk varies based on the project

Best for: Investors who want a mix of returns and exposure to different markets.

3. Delaware Statutory Trusts (DSTs)

A Delaware Statutory Trust 1031 is a legal structure that allows investors to co-own large real estate properties. DSTs are commonly used in 1031 exchanges, but they also work well for passive income seekers.

You buy a share in a trust that owns a commercial or multifamily property. A professional sponsor handles everything—leasing, maintenance, management.

Pros:

• 100% passive

• Eligible for 1031 exchange tax deferral

• Access to high-quality assets

• Stable monthly income

Cons:

• High minimum investment (often $100,000+)

• No control over decisions

• Not very liquid (5–10 year hold period)

Best for: Accredited investors or those exiting active property ownership who want to stay in real estate without managing it.

4. Private Real Estate Funds

Private real estate funds pool money from investors to buy and manage income-producing assets. These are typically run by experienced firms and are structured for long-term growth and income.

Funds can focus on different strategies: core (stable income), value-add (renovations), or opportunistic (higher risk/reward).

Pros:

• Professionally managed

• Strong diversification

• High potential returns

• Typically pays regular distributions

Cons:

• Requires a larger investment

• Often only open to accredited investors

• Lock-up periods (can’t access funds for years)

Best for: Investors with higher capital looking for solid returns and low involvement.

5. Turnkey Rental Properties

This is the closest passive option to owning real property. Turnkey companies sell you ready-to-rent homes and manage them for you.

You own the property, get the income, and the company handles the tenants and upkeep.

Pros:

• Direct property ownership

• Income and appreciation

• Property management handled for you

Cons:

• Still, some owner responsibilities

• Vacancy and repair risks

• Higher entry cost

Best for: Investors who want physical ownership but minimal day-to-day involvement.

How to Choose the Best Passive Real Estate Investment for You

Picking the best passive real estate investment depends on your goals, risk tolerance, and how involved you want to be.

Ask yourself:

• How much capital can I invest?

• Do I want monthly income, long-term growth, or both?

• Am I okay with locking in my money for years?

• Do I qualify as an accredited investor?

• Do I want to own physical property or just invest in shares?

Also, look at the fees, sponsor track record, and investment strategy. Do your homework—or better yet, talk to a real estate investment advisor who can help you sort through the options.

Common Mistakes to Avoid

Passive investing isn’t risk-free. Here are a few mistakes to watch for:

• Ignoring fees: Even “passive” options can come with high fees that eat into profits.

• Not diversifying: Don’t put all your money into one project or platform.

• Chasing high returns: If it sounds too good to be true, it probably is.

• Skipping research: Vet every deal, sponsor, and platform before investing.

Remember: you may not be managing the property, but you still need to manage your money.

Final Thoughts

The best passive real estate investment isn’t the same for everyone. It depends on your goals, experience, and how hands-off you really want to be.

For many, REITs offer a simple starting point. Others may find better returns with crowdfunding or DSTs. Whatever you choose, make sure it fits your financial plan and comfort level.

Passive investing makes it possible to build real estate wealth—without the midnight phone calls about leaking pipes.