Investing in real estate is an excellent business move, especially for those interested in diversifying their business portfolio and receiving a passive income. It’s well-known that being involved with real estate is beneficial for financial sustainability, but often, people lack the time and expertise to get their investments off the ground in this area.
For those who struggle to find time and resources to start involving themselves with real estate, becoming a residential real estate investor may be the ideal opportunity. Investing in a real estate partnership is a great way to begin your real estate journey; it’s low risk, high reward, and minimal work.
Residential Real Estate Investing
Buying a home can be intimidating — even more so when purchasing one with the intent of it being an investment property. Investment properties require time, education, resources, and patience. Additionally, many don’t want to deal with the list of potential issues when purchasing an investment property: from difficult tenants to unforeseen structural issues, it’s easy to understand why. Real estate partnerships exist for this very reason: to give financial sustainability and freedom from handling the groundwork.
The best kind of partnership is a symbiotic partnership — the company partners with individual investors, who put down the capital for the down payment and renovation. As a result, the company takes 50% of the cash flow and final sale, and investors get the other half. This type of partnership enables you to essentially become a silent partner. You’re free to stay away from the property as much as you wish; you don’t need to try and find the perfect property, negotiate the contract, hire contractors, or go about looking for tenants. Everything is handled by the company you have invested with. Everything critical to the investment is taken care of, and you’re able to sit back, relax, and receive 50% of the cash flow every month.
Ontario Real Estate Partnerships
Not only do you receive consistent passive income from your investment, but you’re also able to receive the tax benefits that come along with it. Partnerships that are 100% Canadian have access to advantageous tax benefits. In the instance that a non-resident aims to invest in a Canadian partnership, they ideally should hold their interest via a Canadian corporation to keep the Canadian partnership tax status.
When beginning your real estate partnership journey, it would be a wise idea to look at a company that has a primary strategy of buying, renovating, refinancing, renting, and repeating. Although it may seem complex, the strategy is relatively straightforward: purchasing homes under market value, renovating, adding a second unit, and updating it to increase the value. The next step involves refinancing the property to get money for the next one. During this process, the first home is rented at a high value, generally with a 5 to 10-year mortgage.
Aside from the hands-off approach and guaranteed passive income, real estate partnerships are also transparent. You don’t have to worry about anything from your investment, and the company provides quarterly reports to ensure that everyone is kept up to date and on the same page.
If you’d like to succeed in real estate, it requires education and action. Real estate partnerships are an excellent starting point for those just entering the market; these partnerships are long-term strategies with long-term payoff. Forming real estate partnerships is a long-term strategy with a long-term payoff. It offers monthly cash flow, a sustainable passive income, and a hands-off approach while financially involved with real estate.
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