We have found real estate to be one of best investment options to grow wealth and build streams of passive income. Whether you are an active or a passive investor, the benefits are endless. We want to focus on highlighting some major benefits of being a passive real estate investor.
No Hassles of Property Management
Passive real estate investing allows you to experience all the benefits of owning real estate without all the hassles of property management. You don’t have to deal with clogged toilets or with bad tenants on your own. The experienced property manager deals with all these aspects so you don’t have to; you just collect the passive income and grow your wealth.
You Can Leverage Someone’s Experience As A Passive Investor
Every real estate investor faces obstacles, so it is important to know how to overcome these obstacles. If you are a part time investor, you will likely make mistakes because your real estate portfolio isn’t getting your full time attention, or you may not have enough experience. On the other hand, if you are a passive investor, you get to leverage an experienced investor who devotes all their time to managing real estate. This allows them to have a competitive advantage over part time investors, because they have more knowledge, more experience, and stronger lender and broker relationships.
You Don’t Need to Worry About Financing
Obtaining financing is a key aspect of real estate investing, and it can present many challenges if you are doing it on your own. If you are trying to build your own portfolio of rental properties, there is a point in time when the banks will stop providing you mortgages. Many lenders are making it more challenging for individuals to obtain financing, with stricter underwriting requirements and debt-to-income ratio requirements.
These challenges can be avoided through passive real estate investing, where a professional real estate investor takes on the burden of obtaining financing. The experienced investor has the net worth and liquidity (or relationships with guarantors) and strong lending relationships allowing them to obtain numerous commercial loans at competitive rates.
Passive real estate investing has favourable tax treatment because the property depreciation expense reduces the taxable income on a multifamily property. An apartment complex can be cash flow positive but after accounting for depreciation, the property appears to be operating at a loss on a tax basis. This is beneficial because it allows for positive cash flows to be paid out as distributions to investors, and the distributions can sometimes be received tax free.
CPI Capital understands the numerous benefits of passive real estate investing, and that is why we are passionate about helping others experience these benefits. We aim to educate others on these topics and strive to provide high quality investment opportunities to our investors. If you want to get access to our exclusive investment opportunities, sign up for our Exclusive Investors Club.
– Ava Benesocky
CEO, Co-Founder Canadian Passive Investing
– August Biniaz
Chief Strategy Officer, Co-Founder Canadian Passive Investing