If you’re new to real estate syndication, you may wonder what’s in it for you. After all, it does cost money to invest and significant time to manage your property portfolio. Why should you bother with this if there are plenty of other ways to generate income? As it turns out, participating in a real estate syndicate has some considerable benefits that make the hassle worth your while! View here to know some of the key advantages of investing in syndicated real estate:
Diversification
Investing in a single property individually can lead to significant losses if something goes wrong (e.g., legal snafus, bad renters, etc.) Syndication allows you to buy big assets with different investors and attain direct property ownership. Therefore, you have the opportunity to diversify your portfolio among multiple properties in different locations. It helps to reduce your risk significantly. This will definitely sound like music to your ears if you’ve had a crisis of faith in the state of the economy as of late.
You Can Focus on Your Business
While investing in real estate and growing a portfolio with residential property alone is certainly possible, it will require you to focus more on your property management. This isn’t necessarily a bad thing, but it does increase the amount of personal time you’ll need to devote to your investments. If this does not bother you, you should continue doing what works for you. However, if you’re simply looking to invest and let someone else deal with the headaches of property management, syndicating will be right up your alley.
In most cases, equity companies or syndicators take care of all of the details regarding taxes and maintenance. This means you don’t have to worry about ever evicting a problematic renter or negotiating lease terms with tenants. You only have to purchase your share of the investment- no more work is required.
More Control Over the Timing of Your Returns
Since there are multiple properties in your portfolio, you’ll have the potential to increase or decrease your investment’s value at any time. It means you don’t have to hold the property for a minimum of time (e.g., three years) before realizing a return from it. Some syndicators can allow investors to sell their share of the investment anytime and receive their profits immediately. If you’re dealing with large amounts of money and would like to be able to adjust as circumstances change, you should think about this.
You’ll Have a Consistent Income
Syndication allows you to receive an income from your investment consistently. Property management companies can receive payments from renters regularly, meaning that you don’t have to worry about determining the property’s value and deciding when it would be profitable to sell. You’ll know each month how close you are to receiving your investment’s return and whether or not you need to make any changes.
Conclusion
That’s a rundown of the significant benefits of real estate syndication. If you’re interested in learning more about the process, there are plenty of resources for you to study. It is advisable to always research before jumping into any deals to be entirely prepared for what it takes.
