Engineers should invest in real estate syndications to diversify their investments and create passive income. In addition to periodic “mailbox money,” syndications have additional benefits. They facilitate access to professional management, leverage for large-scale investments, and potential tax benefits while requiring minimal time to manage. These deals provide a relatively safe investment with higher returns than the stock market when considered on a historical basis.
- Investing in real estate syndications can be a great way for engineers to increase their wealth over the long term. There are 2 types of passive income, including payments during the hold period and equity gain at the sale of the asset. These provide net returns that are often higher than other opportunities. Investing in commercial multi-family properties, such as apartment complexes or build-to-rent homes provides excellent passive income. Due to professional property and investment management, these deals take little time to oversee after closing.
- By diversifying their investments, engineers can reduce the risk of their overall portfolio while increasing the potential for returns. Diversification is a time-honored technique that can reduce the overall variability in valuation.
- Investing in syndications also allows engineers to benefit from the expertise of professional real estate sponsors and provides access to larger-scale investments which may not be available to individual investors. At CREI Partners, we prize our historically proven commercial real estate property management acumen. Wayne Courreges is a professional sponsor and certified property manager. He has the experience to strategically improve properties and weather any storms that may come up. As a team with other partners, Wayne offers the opportunity for investors to access larger-scale investment properties that would be hard to purchase on their own.
- Finally, investing in syndications may offer potential tax benefits through depreciation. Depreciation is the reduction of the value of an asset over time, with the ability to have accelerated depreciation through a cost segregation study. Depreciation reduces the tax owed on passive income by creating a paper loss that reduces profit. Be sure to check with a tax professional to verify how this will affect your personal situation.
Overall, engineers should invest in real estate syndications because it is a great option for professionals who are looking to diversify their investments and create passive income. With the combination of potential for higher returns and professional management of the property, syndications offer an attractive option for engineers who are looking to increase their wealth and achieve financial security.