What’s Next After Being a Landlord? How Sophisticated Investors Leverage Real Estate Funds to Build Real Wealth Without the Headaches

Direct ownership of real estate has long served as a dependable strategy for building wealth. However, as markets become more complex, operating costs rise, and regulatory pressures increase, a growing number of landlords are reconsidering their approach. Some are seeking to reduce the time and effort involved in active management, or to step away from it entirely, while others are exploring more efficient and strategic ways to remain invested in real estate, given the current shifting landscape.

For those looking to maintain real estate exposure without the day-to-day responsibilities and some of the liabilities of property management, the answer increasingly lies in real estate investment funds. These pooled investment vehicles offer a professionally managed, scalable alternative that preserves the core benefits of real estate investing while minimizing the burdens and risks that come with direct ownership.

Funds like those offered by McGillivray Capital Partners (MCP) offer a distinct alternative to income-focused real estate strategies and REITs. By providing access to development-stage projects in some of Canada’s fastest-growing urban corridors, these funds allow passive investors to participate in early-stage value creation aligned with municipal growth plans and infrastructure investments. According to Andrew McGillivray of MCP, “This model takes real estate investing in a new direction—investors share in the value created at every stage, all the way through to the final profit.”

The Growing Complexity of Direct Ownership

Income-generating real estate continues to offer long-term potential, but, for some real estate investors, the challenges of evolving markets are prompting a closer look at alternative strategies with similar benefits.  

Regulatory frameworks around rent control, evictions, and landlord licensing have evolved in many jurisdictions, introducing new layers of compliance that some owners may find burdensome or unfamiliar. Rising municipal taxes, higher insurance premiums, and the escalating costs of maintaining older buildings, especially when considering aging infrastructure and stricter energy-efficiency standards, are also leading some investors to reconsider their strategies.

The cumulative burden of tenant turnover, arrears, maintenance, and dispute resolution can further discourage those managing their own properties. Even with third-party management, oversight and decision-making are still required.

For investors seeking reduced responsibility and greater lifestyle flexibility, the ongoing demands of direct ownership can begin to outweigh its advantages. The need for income, inflation protection, and capital preservation remains, but the appeal of being a hands-on landlord might not.

The Case for Real Estate Funds

Real estate funds allow investors to retain exposure to real estate while shifting responsibility for asset selection, construction, operations, financing, compliance and other activities within the scope of the fund to professional managers. Depending on the mandate, a fund may focus on stabilized income-producing assets, value-add redevelopment, or new developments from the ground up.

Passive Income with Professional Oversight

Real estate funds provide investors with professional oversight across every stage of the investment. Experienced managers make strategic decisions, often backed by institutional-grade due diligence and execution teams.

Some funds, like income-focused REITs, rely on professional teams to manage stabilized, revenue-generating properties, overseeing leasing, maintenance, and tenant relations to support consistent cash flow. Development-focused funds, such as MCP’s funds, apply that same level of oversight to the full lifecycle of a development project, including acquiring land, managing construction, navigating approvals, and executing sales. 

Both models remove operational pressure from the investor. Development funds, however, can offer the potential for higher targeted returns by providing an ownership stake, allowing investors to benefit from early-stage value creation as well as the profits realized when the project is exited.

MCP offers a fully managed investment model designed for passive investors, handling everything “from acquisition and development to the final sale,” according to Andrew McGillivray, with returns realized at project completion. This structure offers investors a genuinely passive experience while targeting returns of 20% or more through comprehensive oversight of the entire project lifecycle. 

Diversification Across Markets and Asset Types

Funds offer investors a streamlined way to diversify their portfolio by providing access to markets and property types that might otherwise be out of reach. Investors can gain exposure to geographic areas they don’t live near, where owning and managing property directly would be more difficult, and expand into sectors where they have less expertise, allowing them to participate in opportunities they might not be able to access on their own.

A single landlord may own a handful of units in one city. A well-structured fund, by contrast, may hold dozens of properties across multiple regions and asset classes, reducing exposure to localized market shocks. Some funds are national in scope, while others may specialize in high-growth secondary markets or underserved sub-sectors like medical offices or industrial logistics.

For example, MCP’s focus on mid- to high-rise, transit-oriented projects in growth-designated urban centers offers exposure to dense, residential developments that benefit from long-term demographic and infrastructure tailwinds, allowing investors who could not participate in a project of this size on their own to access the potential upside.

Replacing or Complementing Direct Real Estate with Fund-Based Investing

Real estate funds are not necessarily a departure from property investing—they can serve as a natural extension or evolution of an existing portfolio. For current landlords, funds offer a way to diversify holdings and increase exposure without taking on the added operational demands of acquiring and managing additional properties. At the same time, they offer a path to reduce hands-on involvement while maintaining access to real estate’s long-term growth and inflation-hedging benefits. Whether used to complement active ownership or as a stepping stone away from it, funds provide flexibility and scalability. 

However, there are certain situations where this strategy may be especially beneficial.

Reallocating Equity After Property Sales

Following the sale of one or more rental properties, many investors face the challenge of how to reinvest large amounts of capital effectively. Real estate funds provide a turnkey solution, offering immediate diversification and professional oversight without the need to re-enter the active ownership cycle. This approach can preserve real estate exposure while avoiding the time pressure, transaction costs, and risks of sourcing and managing new properties directly.

Simplifying Portfolios in Retirement

For those nearing retirement, simplifying portfolio management becomes increasingly important. Real estate funds eliminate the burden of tenant issues, repairs, and compliance obligations, freeing up time and reducing stress. Investors can remain in the real estate market, but with a hands-off approach.

Scaling Exposure Without Geographic or Operational Limits

High-net-worth investors often look to expand real estate exposure beyond local markets or property types they’re familiar with. Funds enable access to professionally underwritten projects that may be difficult to pursue independently or without significantly expanding workload.

Reducing Liability While Staying Invested

Landlords who are considering stepping away from active management often want to retain a real estate component in their portfolios without the liability or unpredictability of ownership. Funds provide a clean transition by offloading responsibilities such as maintenance, legal compliance, and tenant relations to professional managers. 

As with any investment, thorough due diligence is essential. Investors should evaluate a fund’s management expertise, investment strategy, and alignment of interests, along with key structural elements like fees, governance, and exit timelines. MCP’s funds, for example, are built around a transparent framework, with regular reporting and co-investment from the fund’s Partners to ensure alignment. While capital is committed for the duration of the fund, this long-term structure allows access to return potential not usually available in more liquid real estate vehicles.

Building Real Wealth Through Strategic Real Estate Exposure

Real estate has historically been a foundational asset class for wealth creation, but how that exposure is achieved is now more flexible. For those who have built capital through active ownership, the next step is not necessarily outside of real estate, but a more passive, while still strategic, version of the same investment path. It can offer not just financial continuity, but greater freedom, as well.

McGillivray Capital Partners’ funds are well-positioned to serve this shift. By offering access to professionally managed, development-stage projects in high-growth urban corridors, MCP provides a differentiated alternative to traditional rental-based models or income-focused REITs. The firm’s fully managed structure, co-investment alignment, and targeted return profile make it an appealing option for investors seeking real estate exposure without the operational burden. For those ready to evolve their real estate strategy, MCP offers a new way to remain invested while adapting to new goals, constraints, and opportunities.