If you're thinking of starting a real estate business, you need to know what the terms mean. Some of these terms include Active, Passive, and Combination. You can read on to learn more. If you're considering starting a business of your own, you need to find a niche that is right for you. There are many different kinds of real estate, so find one that fits your personality. You can then start earning income immediately! Common law Property law is a legal branch that governs the rights and property of the owners of both tangible assets and intangible ones. Common law applies to all assets, unlike intellectual property law, which is focused on private property. It also covers non-dayto-day living property, construction, as well as valuables like art, antiques, or collectibles. Active Depending on your goals and needs, you can choose to invest actively in your real estate company or passively in apartment syndications. Both types of business have their advantages, but some are better than others. An active realty investor could be a full-time professional investor. This type of investment is more likely to earn higher returns and has fewer risks than passive investments. This allows the GPs to participate in deals without putting their entire money at risk. This type of investment aligns the interests and allows the GP give confidence to his orher investors. The risk involved with active investing is higher than that in passive investment, as the investor is personally responsible for losses and loan guarantees. But, every investment is risky and active investors need to weigh the risks before investing. In addition to the risks of active investment, active investor must also consider costs, geography, management needs, and accessibility to tenants and buyers. This type investment requires a personality that is suitable for each individual. Passive Passive real estate is where you put your money into the property but largely stay out of the deal. It can benefit an investor's portfolio as it allows them to get more deals. Passive real-estate investments are those that purchase property to let out and allow someone else to take care of its maintenance. This type of property investment can help diversify your portfolio and provide a steady stream income. There are many benefits to passive real estate investing. Passive real estate investing is less expensive than traditional investments and requires less time commitment. The S&P 500 United States REIT Index tracks publicly traded real estate investment trusts. This index is often a better choice for those who want to invest in realty. Passive investment is an easier way to invest in real estate. Combination If you're in the real estate business, you've probably heard of the concept of combination deals. In such a transaction, the landowner sells their land to a construction contractor who builds a structure. The landowner must purchase the land first in a realty union, then lease the property to a contractor. A combination deal can help you reduce your real estate taxes. These common pitfalls are worth avoiding.