Residential Real Estate Investor
In very simple terms, the definition of a real estate investor is simply a person who invests in real estate. However, this simple definition does not always tell the true story of what a real estate investor is and what type of real estate they invest in. We will explore passive real estate investors, active real estate investors, and short term real estate investors as a way to define real estate investors, their characteristics and goals.
The most commonly known investor is the residential real estate investor who many recognize as their landlords. Generally speaking, these types of real estate investors are identified by two categories:
(1) those who purchase, repair, and sell residential real estate; and
(2) those who purchase, repair, and lease or rent real estate.
This category of real estate investor may be further defined as:
Passive - A passive residential real estate investor is an investor who may turn over the management of residential properties to a property management team and have little (or nothing) to do with the day to day management of the property (or properties).
Active - An active residential real estate investor is defined as an investor who personally handles a property including rent collections, maintenance requests, and other day to day operational aspects of property ownership.
A real estate portfolio for the residential investor may be comprised of one or more single family dwellings, or they may be large portfolios of apartment complexes. Depending on the size of the residential investors portfolio they may hire a property manager or a property management company. Some residential property investors purchase homes that are in a single neighborhood and live nearby in order to manage the properties themselves.