There are several ways to hold your Real Estate Investment, including personally, through a corporation, partnership, Trust, mutual fund trust, and more!
Real Estate Investors frequently ask us if they should set up a separate Real Estate Investment Corporation or hold the asset personally. We are often questioned whether they should set up a Real Estate Investment Fund.
Several significant considerations influence how you hold your Real Estate Investment, whether in a Real Estate Investment Corporation or another vehicle.
The primary three considerations include:
- Active versus Passive Involvement – Your objectives shape your real estate investment strategy. We value your preferences and circumstances, so we ask our clients to consider how ‘hands-on’ they’d like to be in a project. Are you interested in making day-to-day decisions, reviewing rent collection, or managing the development cost budget? Or are you seeking a passive real estate investment where you provide the capital and hire experts to manage the investment? Your age, stage of life, family situation, and existing job or business commitments are significant factors in this decision.
- Size and Longevity of Portfolio—Are you holding one or two properties? Do you own raw land, land under development, or multiple investment funds? Do you have an existing business that isn’t real estate-related? This could impact your current tax situation and warrants careful consideration.
- Who will you invest with? – Historically, putting up the required capital individually and making real estate investments was more common. With values going up and scarce access to capital, we are seeing more and more clients syndicate investors or apply more efficient pooled forms of leverage. Once the investment involves multiple stakeholders, it is critical as the sponsor to review the pros and cons and ensure your project is investable, which could be through a real estate investment corporation, a partnership, or even a real estate investment fund. A significant part of this decision is the current market state, how you see your future real estate investing and investment horizon.
Through our consultation with your existing team, Westcliff is ready to create a tax-efficient real estate investment plan that aligns with your objectives. We are here to support you every step of the way, ensuring you feel confident and secure in your investment journey. We invite you to reach out today at Info@westcliffam.com to book a complimentary consultation and start your journey toward a personalized investment strategy.
