There are so many fantastic aspects of real estate investing such as cash flow, appreciation, tax benefits, and real estate acts as a hedge against inflation.
Sometimes people can’t experience these benefits because they don’t have enough time, money, or expertise to invest in real estate on their own. Real estate syndications solve a lot of these problems, and actually have numerous benefits to participate in them as a passive investor. Here are 4 of the top benefits of real estate syndications:
Real estate syndications allow for the opportunity to diversify into various properties. If you live in an expensive real estate market like Vancouver, BC it can be very expensive to just afford to buy just one rental property. If you invest in a syndication, it allows you to diversify into numerous properties. Through this diversification, you are minimizing vacancy risk of owning one property where it goes vacant and then you have 100% vacancy. If you invest in a real estate syndication of 100 units, if one unit goes vacant, then you only have 1% vacancy.
- Access To Large Investment Opportunities
Large investment opportunities such as 100+ unit apartment complexes can generate much stronger returns than smaller properties such as a single family home. The problem is that most people don’t have millions of dollars to buy these large properties on their own. Utilizing the real estate syndication structure, allows investors to have ownership in these large 100+ unit apartments for as low as $10,000.
- Ability to Invest completely passively
A major benefit of real estate syndications is that you can do it completely passively, meaning you can get fantastic returns through real estate ownership and you don’t have to worry about managing tenants or fixing toilets. You get to rely on the expertise of a skilled management team to ensure that they find the best available properties, and that they are managed effectively. This enables you to get all the benefits of real estate investing, without the hassles of being a landlord.
- Tax Deferred Status
Real estate syndications allow for extremely tax efficient income for the passive investors. Investing in apartments for the cash flow through a syndication, will allow the investors to receive quarterly distributions with no tax exposure. This is because the property is producing positive cash flow allowing for distributions to be paid, but the depreciation and interest write-offs allow for these distributions to be received tax free by passive investors.
As you can see, there are numerous advantages to investing in real estate syndications as a passive investor. If you would like to learn more about being a passive investor in one of CPI Capital’s deals, sign up for our exclusive investor club to be notified of our next opportunity.
– August Biniaz
CEO & Founder, Canadian Passive Investing