Hands-On vs. Hands-Off Investment – Which is better for you?

Building, managing, and maintaining a long-term investment portfolio can be an extremely rewarding project to commit yourself to. If taking it seriously and treating it like a business, you can stand to form quite the profitable venture – perfect in helping you to achieve financial freedom. 

Are you looking to get into the world of investment, and are wondering which type of strategy might fit in best with your lifestyle? Well, for some more information, here’s a short breakdown of some of the different positives and negatives associated with each strategy. To start with, let’s take a closer look at what a hands-off investment strategy might look like.  

Hands-Off Investment strategy 

For the busy entrepreneur that has their own primary career and source of income to worry about, a hands-off investment strategy is a perfect way to dip their toe in the water without committing too much of their time and effort. Finding the perfect investment, one that’s stable, profitable, and viable for the long term, can be quite the challenging venture, and many require a lot of close attention once you’ve got hold of them. However, that doesn’t mean that you personally have to be paying that attention. 

If you look at property investment, for example, it’s a tactile investment strategy that might need a little bit more attention paid to maintaining its different components (particularly if you’re renting out the property to a tenant to make back rental yield payments). This added level of commitment, while worth it in the long run due to the added long-term stability and financial benefits that property can bring, is often a concern for investors. This is especially true for beginners, and so they have dedicated management companies to deal with the majority of issues in the day to day, leaving you as the investor to take the rental yield income without the strain. This is common in successful developments around the UK at the moment – RWinvest, for example, offers its investors a bespoke management company and service to deal with tenant issues in their luxury apartment builds. 

Tip – Feel like you don’t have the time to allocate towards a personal investment strategy? Why not do some research into passive income streams and investments instead? Learning about an investment or even investing small amounts through your smartphone can be a great way to start without it eating up too much of your time. 

Hands-On Investment strategy

As the name might suggest, a hands-on investment strategy tends to put you in further control of your investment strategy, with a direct say in the minutia of what’s going on and the day to day dealings. While there are a lot of things that you ultimately don’t have a say over in what can at times be a volatile and hard-to-predict market, those who put the hours in and do their thorough research can find deals that others might not be able to. 

If you’re knowledgeable in your investment field, this strategy is also really good for getting the most out of your investments and optimizing every step, rather than leaving your investments to their own devices. This isn’t to say that an investment that’s left to its own devices won’t be successful, but if you’re experienced and know that you could be making more money and faster, then why wouldn’t you put that extra bit of effort and energy into a project. 

Again, with regard to property investment, specifically, a good example of this would be if you’ve had properties in a certain area before that have been profitable. If you know what sorts of areas in demand, and how to best attract in a good tenant, this also might be a better option for you to go with since you can leverage your previous successes. 

Other things to consider in an investment strategy 

Overall, whether or not you decide to take a direct approach to your investment, thinking about your personal goals and aims will help you in determining what you want to commit and allocate to a given project, and also whether you think your strategy needs to be tackled from a hands-on or hands-off approach.  

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