Many investors are turned off by real estate because they do not have the time or inclination to become landlords and property managers. Both of which are in fact, a career in themselves. If the investor is a rehabber or wholesaler, real estate becomes more of a business rather than an investment. Many successful real estate “investors” are actually real estate “operators” in the real estate business. Fortunately, there are other ways for passive investors to enjoy many of the secure and inflation proof benefits of real estate investing without the hassle.
Los Lagos RD specializes in helping seasoned and first time investors from all around the world identify and purchase real estate investments. We help investors achieve true passive income by providing education, property rehabilitation, tenant placement and professional property management.
Here are the top 5 reasons why passive real estate investing is one of the best ways to make your money work for you:
#5 – Let Uncle Sam work for you
In an equity structured investment, passive real estate allows tax-deferred cash returns that lets you keep more of your earnings. Unlike interest payments or stock dividends that can be taxed at your highest bracket, your share of depreciation expense works to offset your income thanks to the pass-through benefit of real estate ownership
#4 – No tenants, no toilets and no trash
When you are a passive real estate investor, you do not deal with the hassles of day-to-day-management. Leaky faucet? You’re not getting a call at 2am. Broken gate? It’s not your responsibility to call the handyman.
#3 – There is no bank to deal with
Dealing with banks is just plain hard. Since the economy went south, banks have started to require even more documentation to get loans and the process is both time-consuming and mind numbing. When you are a passive real estate investor, your investment is tied to a professional private real estate investment company that already has relationships with select banks. They navigate the bank financing waters on your behalf so you don’t have to.
#2 – Leverage the “smarts” of other people
You always have the option in any investment to go at it alone, whether that means investing in stocks through an online brokerage like eTrade or buying your own investment property, but there is something to be said for leveraging the intelligence of the people around you. Some real estate investors devote their lives to learning the in’s and out’s of the market and passive real estate investing allows you to benefit from their deep education.
#1 – Make money while you sleep
Passive real estate investing can be incredibly quick. You do diligence, sign legal paperwork online and transfer funds almost immediately. It is not intended to become a second job and you can literally make money while you sleep. Primarily when investing in properties with existing tenants where there is existing cash-flow, your money is working for you 24/7.