Real estate makes for a striking addition to investment portfolios, allowing people to diversify their assets and potentially grow wealth. However, it is not a one-size-fits-all approach, and people should weigh out the benefits of purchasing individual properties or REITs before making decisions.
Fort Lauderdale, FL -- (SBWIRE) -- 08/23/2021 -- Investing in real estate will require the purchase and often management of properties, including single-family homes, multi-family homes, condos, commercial properties, office buildings, and even land that may have future development. You can buy or hold the property, or flip it and turn it into a hidden gem, and then turn around and sell it to make a profit. You can purchase residential real estate through Florida commercial mortgages experts.
Real estate investments allow you to take advantage of tax benefits by enabling you to deduct your expenses (mortgage interest, taxes, repairs, etc.) and provide more control over the property itself. Typically, when you purchase a property, you are the one in control over the investment, get to decide how it is managed, and decide how tenants may use the space.
REITs (real estate investment trusts) are companies that own and operate income-producing real estate. Typically, they have ownership over commercial spaces such as apartment buildings, shopping centers, and hotels. They allow investors to add real estate to investment portfolios without buying or directly managing the property. The REIT takes on the responsibility for that, while investors provide capital by purchasing shares, thus receiving regular dividends.
They provide passive cash flow because 90% of the taxable income has to be given to investors in dividends, making these properties well-managed with low operating costs. They are also easier to buy because they go through similar purchasing processes as mutual funds and individual stocks. You can purchase these through brokers that offer non-public offerings.
Deciding which is right for your investment strategy will depend on your end goal. If you are looking for passive income, a REIT may be a fit, but if you enjoy having control over property and flipping them to make a profit, consider a real estate investment.
Monroe Funding Corp offers hard money lending, conventional mortgages, and commercial loans to South Florida. Our loan process is asset-based only, allowing borrowers to receive the funding they need much faster than traditional lending. For more information, please call us at 954.419.3537.