It seems that many of us learn about the “American dream” of homeownership at a very early age, and for some, that dream can stick with us.
When I was working in real estate sales and as a contractor, my ultimate goal was to own a LOT of real estate. The more, the merrier!
Not to be a Scrooge, but now I’m now starting to question the premise that “owning more is better.” Is ownership really the only, or even the best, way to make money investing in real estate? Or are there better ways?
Related: When You Should and Shouldn’t Consider Rent-to-Own Investing
Control vs. Ownership
As I get older and hopefully wiser, I wonder if the best way to invest in real estate is always buying and holding properties, along with all the management and maintenance that comes with it. Or are there better ways to invest that are just as effective and efficient—with less risk? Is ownership really the dream we’re after—or is it more about control?
Today, I’m heading down the path of controlling more assets than I own, especially as I’m approaching my retirement years, and I’m always looking for better ways to simplify my life and my investing.
Here are some of ways you can mix up “pure” ownership with other ways of controlling deals.
Of course, some things make more sense to own outright, like shares of the business you run, but there are many things we can control without owning and still enjoy a lot of the benefits of without all the risks that could come along with ownership.
Take trusts, for example. Holding real estate inside a trust could be the perfect entity structure for an investor because “you” don’t own it (the trust does) and you’re not even the trustee or the beneficiary, yet you could still be the manager and control the bank accounts. In other words, the trust takes on the risks of ownership while you maintain the actual control over the assets owned by the trust.
As I’ve always said, “The best form of asset protection is not to own anything.”