Investing in a rental property can be expensive. When you add up the down payment, closing costs, repairs, and operating expenses, it could cost over $50,000 to purchase a property and get it ready to rent. Further, while rental properties can be a good way to generate passive income, unexpected expenses and vacancies can cause the income to be lumpy.

Another issue with rental properties is the lack of diversification. Given the high upfront costs, most people can only buy one property at a time.

Instead of putting all your eggs in one basket, you could consider a much more diversified (and lower-cost) alternative. Leading residential real estate investment trust (REIT) Invitation Homes (NYSE: INVH) owns and manages over 100,000 rental homes. Better yet, it only costs around $35 to buy a share of the REIT. Here's a closer look at this great rental property alternative.

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Source Fool.com