I’ve been in real estate off and on for 15 years, and I’ve seen a lot of changes happen in that time. Thanks to television shows like “Flip This House,” “Property Brothers,” and the upcoming “Beach Flip,” the real estate investment niche has never been stronger. The shows inspire people to think about trying their hand in the business, and hotel conferences teach them the systems.
The problem is, the shows and conferences don’t show you how much work is really involved, so people often try it and then give up. There’s a way you can get in on the action, though, without giving up your free time: passive real estate investing.
Here are 7 great reasons you should try your hand at passive real estate investing.
1. You have the money to spare, but not the time.
You’re a busy person, and simply don’t have the time to spend managing contractors, dealing with open houses, and shopping around for the best deals on houses that can be profitably flipped. You might think that means the business isn’t for you at all, but through passive real estate investing, it totally is! You invest your money, and an expert (like me) takes care of all of the rest. The expert handles all the legwork, and you profit off of your investment.
2. You tried it, and loved it, but couldn’t make it work for you.
Chances are, you either didn’t have the time to really put into it or simply lacked the expertise, personality, or mindset to make a successful venture in real estate investing. Thanks to passive real estate investing, though, you don’t have to worry about not being the expert or being outgoing enough to convince someone to buy a house for $120,000 when you only paid $45,000 for it. Someone else handles the buying, selling, and even rehabilitation, making a successful venture out of your hard-earned investment.
3. You want to be involved, but want someone else to help out.
You have a love for real estate, but are nervous about the intricacies of the real estate flipping business? That’s great for a passive real estate investor! Through passive real estate investments, you can begin to learn about the business while someone else acts as a safety net for you and your money, ensuring there are no costly mistakes that might ruin your chances of a successful venture.
4. You don’t want to deal with the banks and closing issues.
Not only can finding suitable properties for flipping sometimes be a challenge, but the process of closing after you’ve rehabilitated and sold the house can scare a lot of people off. Bank financing can involve a fair amount of paperwork, and it’s important to know what you’re doing when you venture forth. With an expert at the helm, the ship can keep sailing in the right direction until it arrives on the shores of prosperity.
5. The investment works for you while you sleep.
Passive real estate investing can pay off before you know it. Once you take care of the required paperwork, due diligence, legal paperwork, and financial investment, your part of the job is done. This isn’t a second job, but it pays off like one. Quite literally, you can make money while you sleep, because someone else handles all of the legwork of flipping the properties and returning on the investment.
6. Tax benefits
Interest payments and stock dividends are taxed at your highest tax bracket, but passive real estate is different. Because the investment is equity-structured, the government allows tax-deferred cash returns that allow you to keep more of your earnings. Your share of the depreciation costs offsets your income because of the pass-through benefits of real estate ownership. Uncle Sam starts to work for you!
7. No headaches with managing the properties.
If you get involved with passive real estate investment for rental properties, you don’t have to deal with the day-to-day hassles of tenants, toilets, trash, or leaky faucets. You don’t get those 2 am phone calls about broken windows or clogged drains, because someone else is in charge of that. If you’ve ever wanted to just be the “money person,” then passive real estate investment is your game!
There you have it, some excellent reasons to consider passive real estate investing. Give us a call today, and let’s see where we can sail to together, not stopping until we’ve reached the shores of profit and prosperity.