option 1: you do not need a lot of time when you know how to manage. If you do not, sure, you will spend a lot of time.
option 2: IYR, URE will be less return compared to RE. not mentioning tax benefit.
again, you have to spend time to find good deals and manage rentals efficient. If you do not want to deal with people and do not have time in the beginning. I agree that you should buy IYR.