People tend to gravitate to what they know or what seems familiar to them. When considering investments in rental properties, many people tend to commonly consider residential properties such as single-family homes and duplexes, as owning a home is most familiar to them.
By
THIS TWOSDAY'S TAKEAWAYS
1. Passive Real Estate Investments offer an attractive, diversified and streamlined alternative to direct rental real estate ownership.
2. Hassle free investments with an experienced fund manager can create more predictable results and better risk protection.
People tend to gravitate to what they know or what seems familiar to them. When considering investments in rental properties, many people tend to commonly consider residential properties such as single-family homes and duplexes, as owning a home is most familiar to them.
However, directly owning rental properties can be intimidating to some. When, considering all of the factors that go into owning directly real estate, from locating the property to financing to insurance to managing tenants and their emergencies, owning single-family residences or duplexes or small apartment, communities can seem daunting. Unlike owning a home, those chores and repairs that are easily put off cannot be put off when managing rental properties.
Savvy real estate investors will often place their rental properties into a limited liability company to insulate themselves and their personal assets from the many liabilities that can come from owning rental properties stemming from casualty claims, untidy and destructive tenants to the significant weather events and fires. Some of the more curious and extreme cases we have seen range from meth lab explosions/contaminations to teargas extractions by swat teams.
Many investors, however, are not aware that passive investment opportunities are available to them as an alternative to direct ownership of rental properties.
Passive investments in multifamily properties, through limited partnerships, LLC’s and funds offer investors the benefits of direct ownership of rental properties without the myriad complications.
Unlike single-family homes, duplexes or small apartment communities, passive real estate investments with an experienced sponsor offer new ways to diversify the risk, including a more broad group of tenants and a wider selection of properties diversified across not only multiple locations but multiple markets. Each passive investing opportunity is structured with layers of Limited Liability Companies and typically financed with non-recourse debt.
Wilkinson serves passive investors from across the country who all have one thing in common: They are reluctant to take part in the wealth building potential rental real estate ownership holds because they had either heard of or experienced the many difficult challenges direct ownership of rental real estate presents.
