05/10/2022
5 Reasons You'll LOVE Investing Passively:
1. Minimal Time Required
Have you heard the phrase “set it and forget it”? In a group investment, you put money in, collect cash flow during the hold period, and receive profits upon the sale of the property. You won’t be fixing toilets, screening tenants, or handling maintenance. The sponsor team and the property management team expertly attend to those things so you can sit back, enjoy the returns, and focus on living life.
2. Opportunity for Diversification
It would be unreasonable for anyone to attempt to become an expert in every phase of the property investment process, and even more so when it comes to different markets.
By investing with experienced deal sponsors, you can easily diversify into various markets and asset classes while rest assured that the professionals are taking care of business. This allows you to quickly and easily scale your portfolio while also mitigating risk.
3. Did You Say Tax Benefits?
Similar to personally owned rentals, you get pass-through tax benefits when investing in real estate group investments. You’ll be able to write off most of the quarterly payouts, which means you basically get tax-free passive income throughout the holding period. Score! You will, however, likely owe taxes on the appreciation income you earn upon the sale of the property. (Always check with your own CPA on your personal situation.)
4. Limited Liability
When you invest passively through real estate group investments, your liability is limited to the amount of your investment.
If you were to invest $50,000, your biggest risk would be losing that $50,000. You wouldn’t be on the hook for the entire value of the property, and none of your other assets would be at risk, nor do you have to sign on the loan.
5. Positive Impact
With personal investments, you make a difference in two to four families’ lives, which is wonderful. But with real estate group investments, you have the chance to change the lives of hundreds of families and whole communities with just one deal.
Each investment creates a cleaner, safer, and nicer place for people to live and impacts the community and the environment positively. And that’s something you just can’t gain from stocks and mutual funds.