CityVest invests in highly selective real estate private equity investment funds.
Investing in real estate is great for many reasons. One differentiating key element that real estate offers is tangibility. You can’t see or touch shares of stock, and in a time of distress stock could drop to no value. Tangibility offers the real estate investor more control over the asset’s measured value, physical appearance, use etc., for this reason real estate will always hold value. Historically, the real estate industry has been successful in providing financial security. Historical success and tangibility are two great benfits of investing in real estate, but they are more. The following are other key benefits you won’t want to miss:
1. Dependable Income: Whether you’re looking to invest in a REIT or rental property, passive income is a great benefit for real estate investors. Passive income is generated through rental fees paid regularly to occupy an owned space. Similarly, if you own shares of a REIT, you’re monthly or regular dividends are coming from tenants paying rental fees to the owners of the REIT. To generate passive income the location of the property is always in an important factor. Rental fees are calculated by the property's value, and one important factor that contributes to what a property can be valued at is location. If the property or properties you invest are in good locations, let’s say near an urban city or in a university town, your chances of securing a steady cash flow income is high. If investing directly in a property, your passive income could be stretched to cover not only your monthly expenses, but some extra capital to put toward more another real estate investment, retirement, you name it! If you want dependable monthly cashflow, real estate is the asset class you need to be in.
2. Financial Security Over Time: Investing directly in real estate, through crowdfunding, or through a REIT fund, so long as you don’t sell and have steady cash flow, you can obtain long term financial security. While location remains the most important factor, because it dictates how much you can charge for rent, and how much or how little your property will appreciate; if you invest in well located real estate, obtain steady cash flow from day one, and allow the property to appreciate over time, then you are looking at financial security over a long period of time. To obtain financial security., proper research of the location is critical. Financial security is not something to be taken lightly. The older we get, the more we are concerned with the best ways to secure our finances. Collecting a dividend, or from a tenant direct, is a great way to acquire long term financial security.
3. Tax Breaks: Investing in real estate has multiple tax exemption benefits. Holding investments up to three years or more through a REIT or directly through an investment property can yield a capital gains tax that is lower that an investor’s income tax bracket. This gives the investor more pocket money. In addition, for those who own physical property, another perk is that rental income does not fall under the umbrella of self-employment tax. You are then able to write off expenses for maintenance, insurance, depreciation, and property taxes which are great tax advantages.
4. Real Estate Appreciation: Having direct ownership of real estate or investing in shares of a REIT, you will see the benefit of appreciation. Land and property over time, as history has proven, can increase in value ten fold. So, property you invest in, over time, can rise in value and worth. If you look at a properties over the span of thirty years, you will notice that most will show a steady climb in property value. This is the reason why real estate investors administer longer holding periods for their investments.
Different types of property vary in the benefits they offer. Thus, knowing your investment goal will ultimately help you determine which benefits will speak to you. There is always a demand for real estate, and investments never drop to a $0-dollar worth. With that being said, let’s look at different types of real estate properties and the benefits they offer:
Homeownership: Direct ownership of a home is usually a rite of passage for new real estate investors. In a home ownership investment, the investor reaps the benefit of creating a foundation for his or her investment portfolio. Many investors gain their first real estate experience through a homeownership real estate investment. They can gain a solid understanding of the industry, while building their first stages of wealth through equity.
Residential Real Estate: Like homeownership, benefits of residential real estate are either living or renting out property for personal use. A residential real estate property deals with the wants and needs of a homeowner and his or her family which is a lifestyle we are all familiar with. So, residential real estate has the relatable benefit in that we all can attest to it. If you invest in income property through rentals, you as the investor, also have the benefit of passive income typically through monthly charged rental fees.
Commercial Real Estate: Commercial property has a strong benefit of longer leases. Businesses occupying a space typically want to stay in a fixed location until they reach solid footing. For the investor, longer leases equal more stability and dependability. Commercial real estate investors can also choose between different types of lease coverage they want to impose on their tenants. The type of lease between a commercial tenant and real estate owner can render little to no work on the owner’s behalf.
Private Equity: Private equity or ownership has the benefit of flexibility. Private equity is not restricted to the same red tape that financial institutions are bound to in purchasing and selling real estate. In addition, private equity has a strong hold on the distressed property market. Financial institutions avoid fix and flip deals aka the distressed sector of the real estate industry.
Real Estate Investment Trusts: The top benefits of investing in a REIT are as follows: shareholders do not manage any properties, there is steady income, and REITs are professionally managed. By investing in a REIT, you allow a team of industry professionals to manage your money in a pool of properties that they own, manage and will sell, to increase your dividends and over all return.
Industrial Real Estate: Investing in industrial real estate has the benefit of being in a high demand market. With many businesses focused on their online market place, shipping and manufacturing facilities are an absolute need. In addition, tenants of industrial real estate, like commercial real estate, sign longer leases.
Retail Real Estate: One major benefit of investing in retail real estate is that an investor can collect a percentage of the tenant's monthly sales in addition to a rental fee. Like commercial and industrial real estate, retail also has longer leased tenants, and the investor benefits from being able to choose specific types of leases for their tenants.
Mixed Use: Two benefits of investing in mixed-use real estate is variety and diversity. The rent for a mixed-use property can be scaled up due to location and convenience factors. In addition, with a blend of commercial and residential occupancy, the investor can benefit from a balanced real estate investment portfolio.
Investing in real estate, either on your own or through a real estate investment company, can be a great way to build wealth and earn income. Rent paid by tenants along with a buildup of appreciation, benefits the real estate investor that buys property, invests in REITs or goes the crowdfunding route. Many people tend to shy away from the real estate industry because they believe it is either too costly or complex. The truth is real estate is a multibillion dollar industry. Make no mistake, real estate investments are complex, but if executed properly, they can be extremely lucrative. If you can invest in real estate, or if you are looking to expand your real estate investment portfolio you have come to the right place to get started and learn as much as you can about the real estate industry.
Every CityVest investment undergoes a thorough due diligence process by our experienced underwriting team. Of the hundreds of projects reviewed each month, fewer than 1% are approved.
CityVest can help you:
You benefit through professional investment structures, which target passive returns for our investors in a range from 10% to 25% - often with a preferred return.
CityVest pre-screens investments for you through our underwriting and due diligence process. We partner with institutional investment funds and sponsors and we seek a preferred rate of return.
Since real estate investments typically generate cash flow income, while common stock does not, real estate valuations tend to be less volatile and less sensitive to market risk factors.
CityVest will handle all of the accounting and administration of your investment, while you can monitor the returns.
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