--- title: What Is a Direct Property Investment? description: Direct property investing refers to purchasing, owning, renting, managing, and selling property for profit and returns. Read this article to learn more. image: https://www.realized1031.com/hubfs/Images/photo/abstract/sack-laptop-portfolio-IS-1250426655.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # What Is a Direct Property Investment? Posted Oct 2, 2021 ![sack-laptop-portfolio-IS-1250426655](https://www.realized1031.com/hs-fs/hubfs/Images/photo/abstract/sack-laptop-portfolio-IS-1250426655.jpg?width=749&name=sack-laptop-portfolio-IS-1250426655.jpg) Direct property investing refers to purchasing, owning, renting, managing, and selling property for profit and returns. Direct property investment is any real estate investment held either directly through direct ownership on the title or indirectly through collective ownership vehicles like managed property investments. Direct property investments may be residential, commercial, industrial, retail, or any other property asset. ### What Does Direct Property Investment Look Like When It Comes to Rental Properties? So what does direct property investment look like when it comes to a rental property? In the rental property world, direct property ownership would be a landlord structure in which the property owner deals with tenants and handles all of the property’s needs. That would include ongoing maintenance like landscaping, trash, etc. It would also include any issues that may arise with the property. For example, if the toilet is broken, the landlord is responsible for getting a plumber to repair it. Responsibilities in Direct Property Investment: - Pay mortgage - Maintain proper insurance - Make sure you’re following safety codes - Collect rent from tenants - Repair services for anything wrong with house/property - Ongoing maintenance and utilities (landscaping, trash, etc.) This style of ownership has several advantages and disadvantages. The benefits are that the landlord has more control over what happens with their property. They can oversee the day-to-day management of the property, and they’ll know right away if something needs work or something has gone wrong. At the same time, direct property investment in a rental property can be a disadvantage, as it places all of the responsibility on the landlord and owner of the property. ### What About Indirect Property Investments? The alternative to direct property investment is indirect property investment. Indirect property investment is when someone owns a property but is not involved in the daily maintenance and management of that property. That is also known as [“passive property ownership.”](https://www.realized1031.com/blog/landlord-no-more-a-look-at-passive-real-estate-investing) Many people opt for this type of investment. It allows them to make passive income from their rental property without dealing with the everyday responsibilities of maintaining a property directly. That also makes it a good choice for people who purchase an investment property in another state or far from where they live. With that said, people who choose to have indirect property investments tend to have less knowledge of any problems or issues that arise with their properties and, therefore, less control over their property. For investors who want more control over their investments, indirect property investing may not be the best choice. ### Which Investment Is Best for You? The Bottom Line. Deciding whether you should make a direct property investment or indirect property investment depends mainly on the level of control and involvement you wish to have with these properties. If you want to have ongoing participation and oversee daily management, direct property investment is a better choice. If you’re going to have less responsibility for the property or live far away from it, indirect property investing may be a better option. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. All real estate investments have the potential to lose value during the life of the investment. There is no guarantee that investors will receive distributions or a return of their capital. The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Programs that depend on tenants for their revenue, and may suffer adverse consequences as a result of any financial difficulties, bankruptcy or insolvency of their tenants. No public market currently exists, and one may never exist, for the interests of some passive investment programs. Learn Ways To Help Build Long-Term Real Estate Wealth [![Get Tips For Managing Real Estate Wealth](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/IPWM-eBook-250c.jpg?width=250&height=250&name=IPWM-eBook-250c.jpg "Learn new ways to use real ...") ](https://www.realized1031.com/blog/what-is-a-direct-property-investment#blogform) Download eBook ---   --- ### Get Tips For Managing Real Estate Wealth ![Learn Ways To Help Build Long-Term Real Estate Wealth](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/IPWM-eBook-550.jpg?width=550&height=650&name=IPWM-eBook-550.jpg) Learn new ways to use real estate to pursue your wealth goals. 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Direct property investments may be residential, commercial, industrial, retail, or any other property asset. What Does Direct Property Investment Look Like When It Comes to Rental Properties? So what does direct property investment look like when it comes to a rental property? In the rental property world, direct property ownership would be a landlord structure in which the property owner deals with tenants and handles all of the property’s needs. That would include ongoing maintenance like landscaping, trash, etc. It would also include any issues that may arise with the property. For example, if the toilet is broken, the landlord is responsible for getting a plumber to repair it. Responsibilities in Direct Property Investment: Pay mortgage Maintain proper insurance Make sure you’re following safety codes Collect rent from tenants Repair services for anything wrong with house/property Ongoing maintenance and utilities (landscaping, trash, etc.) This style of ownership has several advantages and disadvantages. The benefits are that the landlord has more control over what happens with their property. They can oversee the day-to-day management of the property, and they’ll know right away if something needs work or something has gone wrong. At the same time, direct property investment in a rental property can be a disadvantage, as it places all of the responsibility on the landlord and owner of the property. What About Indirect Property Investments? The alternative to direct property investment is indirect property investment. Indirect property investment is when someone owns a property but is not involved in the daily maintenance and management of that property. That is also known as “passive property ownership.” Many people opt for this type of investment. It allows them to make passive income from their rental property without dealing with the everyday responsibilities of maintaining a property directly. That also makes it a good choice for people who purchase an investment property in another state or far from where they live. With that said, people who choose to have indirect property investments tend to have less knowledge of any problems or issues that arise with their properties and, therefore, less control over their property. For investors who want more control over their investments, indirect property investing may not be the best choice. Which Investment Is Best for You? The Bottom Line. Deciding whether you should make a direct property investment or indirect property investment depends mainly on the level of control and involvement you wish to have with these properties. If you want to have ongoing participation and oversee daily management, direct property investment is a better choice. If you’re going to have less responsibility for the property or live far away from it, indirect property investing may be a better option. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. All real estate investments have the potential to lose value during the life of the investment. There is no guarantee that investors will receive distributions or a return of their capital. The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Programs that depend on tenants for their revenue, and may suffer adverse consequences as a result of any financial difficulties, bankruptcy or insolvency of their tenants. 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