Investing in Real Estate Without Owning Property:
A Guide for Boston Renters

 

Are you a Boston renter who wants to invest in real estate but doesn't have the capital to purchase property? You're not alone. As of February 2025, the median listing price for homes in the Boston-Cambridge-Newton, MA-NH metropolitan area was $839,450. With such high barriers to entry, traditional property ownership remains out of reach for many residents. However, this doesn't mean you can't benefit from real estate investments. In this article, we'll explore several innovative ways Boston renters can invest in real estate without owning physical property.

 

Real Estate Investment Trusts (REITs)

One of the most accessible ways to invest in real estate is through Real Estate Investment Trusts or REITs. These companies own, operate, or finance income-producing real estate across various residential, commercial, and industrial sectors. As a Boston renter, you can purchase shares of a REIT through a standard brokerage account, just like you would buy stocks.

REITs are required by law to distribute at least 90% of their taxable income to shareholders annually, which means they often offer attractive dividend yields. For example, at the end of 2015, the FTSE NAREIT All REITs Index had an average dividend yield of 4.3%, approximately 200 basis points higher than the 2.3% yield on 10-year U.S. Treasuries. If you invested $5,000 in a REIT with a similar yield, you would receive over $200 in annual dividends. This can provide a steady stream of passive income while renting your Boston apartment.

Many REITs focus on specific property types or geographic areas. If you believe in the strength of Boston's real estate market, consider investing in a REIT that has significant holdings in the New England region. This allows you to invest indirectly in the market you know best without the substantial upfront costs of property ownership.


keys in your hands. Image by Unsplash

 

Real Estate Crowdfunding Platforms

Another option for Boston renters is real estate crowdfunding platforms. These online platforms allow you to invest in specific real estate projects with much lower minimum investments than traditional methods. If you're considering this approach, researching the best crowdfunded real estate platforms is crucial for finding opportunities that match your investment goals and risk tolerance. Companies like Fundrise, RealtyMogul, and Crowdstreet offer opportunities to invest in commercial and residential properties across the country, often with minimums as low as $500-$1,000.

For instance, through these platforms, you could invest in a multi-family apartment building in Dorchester or a commercial development in Seaport District. This exposes you to Boston's real estate market without needing a mortgage or property management responsibilities. Crowdfunding platforms typically provide detailed information about each investment opportunity, including projected returns, risk factors, and exit strategies. If you're considering this approach, researching the best real estate investment strategies is crucial for finding opportunities that match your investment goals and risk tolerance.

Many Boston renters find that crowdfunding allows them to diversify their real estate investments across multiple properties and locations, spreading risk while potentially increasing returns. Some platforms also offer eREITs (electronic Real Estate Investment Trusts) that pool investor money to purchase a portfolio of properties, providing even more diversification.

 

Real Estate Mutual Funds and ETFs

Real estate mutual funds and Exchange-Traded Funds (ETFs) might be the right choice if you're looking for even more liquidity and diversification. These investment vehicles pool money from multiple investors to purchase a portfolio of real estate-related securities, including REITs, real estate developer stocks, and mortgage securities. By investing in real estate ETFs, Boston renters can build wealth through real estate while maintaining flexibility in their housing situation.

With mutual funds and ETFs, you can start investing with as little as the price of one share, often under $100. This makes them particularly attractive for Boston renters who want to start small and gradually increase their real estate exposure. Additionally, these investments offer high liquidity—you can buy or sell shares on any trading day, unlike physical real estate, which can take months to sell.

For example, the Vanguard Real Estate ETF (VNQ) exposes you to a wide range of U.S. REITs in a single investment. As of 2025, this fund includes over 170 REITs, providing extensive diversification across the real estate sector. By investing in such funds, Boston renters can gain broad exposure to real estate markets nationally while maintaining the flexibility to remain mobile in their living situation.

 

House, keys

 

Real Estate Limited Partnerships

For Boston renters with more capital (typically $10,000 or more), real estate limited partnerships offer another avenue for property investment without direct ownership. In these arrangements, investors provide capital to a general partner who handles property acquisition, management, and eventual sale.

These investments often focus on specific projects, such as developing a new apartment complex in Cambridge or renovating historic buildings in Beacon Hill. As a limited partner, you receive income and appreciation shares proportional to your investment without managing the property.

Limited partnerships typically have longer investment horizons (5-10 years) and less liquidity than REITs or mutual funds but can offer higher potential returns and tax advantages like depreciation deductions that may offset your passive income.

 

Real Estate Focused Companies

Another indirect way to invest in real estate is by purchasing stocks of companies focused on real estate services, development, or "proptech" (property technology). Boston-based American Tower Corporation, national retailers like Home Depot, or companies offering property management software can provide sector exposure. This approach offers the liquidity of stock market investments with lower entry costs, though individual stocks typically carry more risk than diversified options like REITs or mutual funds.

 

Tax Advantages

Real estate investing offers potential tax benefits even without property ownership. REIT dividends may qualify for the 20% qualified business income deduction, while crowdfunding investments can allow for certain expense deductions. Tax benefits vary by investment structure and personal circumstances, so consulting a tax professional familiar with Massachusetts tax laws is recommended.

 

Getting Started as a Boston Renter

Begin by assessing your financial situation, investment capital, time horizon, and risk tolerance. Many Boston renters start with REITs or ETFs for their low entry barriers and liquidity. Research local market trends and property types in demand, using resources like the Greater Boston Association of Realtors. As you gain experience, diversify across multiple investment types—from REITs to crowdfunding projects in familiar Boston neighborhoods to limited partnerships. This approach allows you to build wealth through real estate while maintaining the flexibility of renting in Boston's dynamic housing market.

 

 

Published 3/10/25.