Real estate investors who like the idea of being a landlord may find active real estate investing exactly what they are looking for, or maybe not. Here are some of the benefits and disadvantages of active real estate investing:
### Benefits
- Maximum control over the real estate investment
- Tax benefits flow directly to the investor
- Minimum fees since a leasing agent and property manager isn't being paid
### Disadvantages
- Investors must understand the ins and outs of managing rental property
- Requires detailed knowledge of the market, including growth trends and landlord-tenant laws
- Least liquidity because large amounts of capital are tied up in the property down payment
- Difficult to scale up and diversify a real estate portfolio when every investment is actively managed
Passive real estate investing occurs when an investor puts capital into an investment such as self-storage but has a third-party who does the majority of the work.
Property managers or sponsors of a private real estate investment will develop and execute the business plan, identify and acquire property that meets the investment criteria, obtain favorable financing, and handle the day-to-day operations of the property.
However, even passive real estate investors need to be active to some degree, such as analyzing the offering memorandum for a crowdfunding or private equity self-storage opportunity, and reviewing regular financial performance reports.
Bring pen/paper/notebook/laptop for note-taking and a mindset for growth!
We have reserved the patio of Country Club in Costa Mesa off of 17th street. Simply ask for AnVi Invest group when arriving if you have any trouble finding us.
We look forward to seeing you there!
Your friends in investing,
-Andrew and Vince
www.anviinvest.com
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