Usually people like to buy or invest in single family homes. For home buyers buying single family homes make sense as they intend to live there but in case of investors, they are out to make money and seeking to get the best returns on their investment. Investing in single family properties though can give good returns but sometimes they are not as lucrative according to the efforts made.

Investing in apartments instead is a lot more profitable and lots of investors have earned millions. But it is certainly not easy, needs a lot of effort and needs to be very aware and informed of the latest real estate market trends.

There are two types of investors, active and passive. You can choose to be either of them depending upon the time, money and passion you have.

An active apartment investor, as evident from the name, is responsible for buying and maintaining the property. They will also be responsible for any renovation or enhancement to increase the value of the property.

So, if you want to invest actively, you must make up your mind to be fully involved and do the due diligence to ensure that deal goes through smoothly, property is maintained, renovated and rents are collected on time. You will also be responsible for finding new tenants, if the existing tenant decides to move to a different place.

As an active investor, you are at greater risk, but returns are enormous and that is how every rewarding business venture is.

Coming to passive apartment investing, here you are just putting money into the business venture but are not part of any effort and own no responsibility. You will be sent regular project updates by the active investor and will receive a part of the profits as per your investment. Here your risks are lower, so returns are also low.

For many successful active investors, passive investing has been their entry point into the world of apartment investing, they learn their ropes, get acquainted with all the terms, nuances and the entire process before taking the big plunge into the big world of active investing.

So if you see yourself as an active real estate investor in future, you can start cautiously with passive investing and gradually enhance your profile, portfolio before investing big.