3 Reasons to Invest in Passive Real Estate
Real estate is a reliable wealth-building vehicle and, in many cases, a fundamental element of securing a diversified portfolio. For many people, it is a way to generate additional income without trading in precious time.
If you are curious about the difference between passive and active real estate investing as well as the benefits of passive real estate investing, keep reading. We’ll also cover how you can learn more about current passive real estate investment opportunities.
Passive vs. Active Real Estate Investing
Passive investing simply means that as an investor you place your money in a real estate deal, but you are not involved in the management of the asset.
As a passive investor, you do not have the responsibility of selecting a property, going through the financing and closing process, or managing matters such as repairs, tenants, and more.
On the other hand, an active investor is responsible for everything listed above.
Benefits of Passive Real Estate Investing
Tax-Deferred Cash Returns
There are several incentives to encourage investment and development in the housing sector including tax-deferred cash returns.
How does this work? For tax purposes, every year that the property ages, it loses value. This is called property value depreciation. As a real estate investor, you can write off a portion of the property’s depreciated value. In turn, this allows you to keep more money in your pocket.
Little Time Commitment
Unlike other investments, you do not have to monitor the day-to-day status of your passive real estate investment. The active investor (otherwise known as the managing partner) handles everything related to the deal. They are responsible for putting your money to work, ensuring the success of the deal, and providing returns. With that in mind, it is important to invest with someone that you know has a good track record and will make the investment a success.
Make Money in Your Sleep
Perhaps the biggest pull of passive real estate investing is being able to make money in your sleep. Once you’ve solidified your investment in a real estate deal, you are entitled to the returns that have been outlined in the investment, all without actively engaging in the operations of the deal.
In summary, when you invest in a passive real estate investment deal, your money is working for you 24/7 to provide a residual income for which you are not exchanging valuable time or energy. This allows you to focus on whatever else is important to you.
Connect Real Estate Capital
The end goal of investing is to make your money work for you and to build wealth. That’s why at Connect Real Estate Capital, we make it easy for people of all backgrounds and experience levels to invest in real estate. By choosing to invest with us, you’ll reap the benefits of a passive cash flow while our experienced team handles the day-to-day operations.
Whether you are a seasoned real estate investor or are looking to get started, we’d be happy to discuss investment opportunities. Click here to connect with one of our team members.
