For those with excess capital, real estate investing is something to consider when looking for passive income and potentially moving you to a lower tax bracket. One of the biggest issues for potential investors is risk tolerance, especially for those without a tremendous amount of liquid assets, but substantial income.
Recessionary concerns are always on the minds of investors, however key indicators point to stable yet persistent growth. There are also a number of additional tax advantages, including protection from capital gains assessments through elimination and deferral. Deductions include mortgage interest, depreciation and operational losses.
Downsides include less liquidity, larger capital requirements for individual investors, legal liabilities including retaining insurance, counsel, and electing limited-liability operating instructions. There are also options for investors to team up with experienced management companies or partnering with more experienced investors.
“One of the upsides of real estate investment is the plethora of options available. Some of the most popular avenues for high net worth and accredited investors include professionally-managed investments (private equity funds, real estate investment trusts (REITS), real estate mutual funds, crowdfunding platforms) and self-managed investments.”