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Private Lending or Landlording: What Makes More Sense Right Now?

November 27, 2023

Real estate investing strategies have always been a topic of debate, with investors considering various strategies to maximize their returns, save on taxes, and accommodate various lifestyle preferences.

Landlording is, of course, the most popular route for investors, but don’t sleep on private lending. In today’s real estate market, with lower inventory and transaction volume, active investors are starting to look at more passive income-generating solutions to replace some of their current investment strategies, such as flipping and owning rentals.

Why the shift? With fewer good deals on the market, coupled with lower profit margins, reduced depreciation benefits, and longer appreciation realization, real estate investors are finding that private money lending could be more advantageous in today’s stagnated market compared to previous years. Here’s a look at the financial considerations of each strategy.