The average stock market return over the last 15 years was just over 7%. But did you know that after fees, taxes and inflation, the actual return was just 2.5%? On the other hand, real estate syndications routinely yield average annual returns of 13% or more and that’s after fees, and make a great hedge against inflation.
Passive income is exactly what it sounds like: periodic disbursements without significant effort beyond your initial investment. With potentially lower volatility than the stock market and higher historic long-term gains, real estate investing can be attractive to growth investors.
Home ownership has fallen 4.5% since 2006 while rentership has increased 8.7%. Demand for apartments has continuously outpaced supply. According to the National Multifamily Housing Council (NMHC), America needs 4.6 million more apartments by 2030.
This high demand is largely due to the ideas around homeownership shifting because Millennials are delaying purchasing a home as a result of lifestyle choices and student debt, while the number of Boomers with empty nests seeking to downsize is increasing.
Multifamily investing offers great tax benefits for investors because individual investors can defer capital gains taxes on a profitable investment by utilizing a specialized type of transaction known as a 1031 exchange. There is no time limit on these exchanges and they can be repeated over and over, which allows for the tax-free growth of capital, while deferring taxes indefinitely.
Benefits Of Passive Multifamily Investment
If an investor has decided that they would like to invest in the multifamily asset class, they have two options for doing so: actively or passively Read More