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Benefits of Real Estate Investing
Cash Flow
Multifamily properties are a great hedge against risk as higher numbers of occupied units allow owners to receive increased cash flow. This is important as it gives owners a suitable buffer to cover the expenses and breakeven point for the property. Also, a stabilized property allows owners to receive a predictable stream of income.
Inflation Protection
When held over a long period of time, real estate is one of the best ways for investors to hedge against inflation, as property values and rental income increase overtime.
Diversification
Real estate can bolster investor returns and decrease risk within various portfolios. The correct allotment of real estate will decrease volatility of an overall pool of assets held in a given portfolio.
Tax Benefits
Real estate investing is one of the most efficient ways to hold wealth. A well thought out investment strategy will allow investors to accrue passive losses from their investment while lowering their tax bill through deductions and property depreciation.
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Employing Wise Alternate Investment Options
An ever-growing number of investors are taking a more hands-on approach in exploring investments past the conventional stocks and bonds markets that are often almost exclusively promoted by many financial institutions.
Our goal is to help investors understand and realize the growth and benefits of incorporating real estate into their overall investment strategy.
It’s Not Just About Diversification
While the real estate market can fluctuate, it has demonstrated that over time it has been less volatile than some other asset classes. The potential for this stability can be a distinct advantage to investors.
Tax Benefits Appreciation
And Cash-Flow
Proven over time, real estate has been a vehicle of wealth creation through various means:
- Tax Benefits – allows owners of real estate to deduct expenses and defer taxes for periods of time
- Property Appreciation – increases the value of the property
- Cashflow – provides a regular stream of income.
The Wise Tree Group ensures that each investment provides all of these to our investors.
Investment Strategies
Each investment strategy has its own risk and return profile
Core
These properties typically have stabilized occupancy, require little to no capital improvements, generate cashflow upon purchase and are usually A class properties. Often, these are institutional-grade properties which represent very low risk, giving investors a lower return as a result.
Value-Add
These are often B and C class properties that maintain slightly lower occupancy, utilize strategic improvements and use renovations to increase cashflow and value of the property. This strategy is medium risk and generates moderate returns for investors.
Distressed / Opportunistic
Assets in this category generally contain significant vacancies, are in states of neglect, have significant deferred maintenance, and poor cashflow. These are typically D class investment properties. which have the highest level of risk, but also have the most potential to earn higher returns.
The Ideal Solution For Risk Vs Return
Real estate investors navigate between three main investing strategies (core, value-add and distressed/opportunistic). These strategies are typically directly correlated between the anticipated financial return and its risk. It is expected that investors will earn a higher return for taking on more risk and vice versa, lower risk earns an investor a lower return.
It is incumbent upon an investor to identify the risk profile that they are comfortable with. Value-add offers the benefits of a stable asset and increased occupancy with generating higher returns than a core asset.
An extensive real estate portfolio may incorporate some or all of these strategies to create a more balanced portfolio.
Passive Vs Active Ownership
The decision between being an active or passive investor is almost as important as the actual real estate and investment strategy itself. There are distinct differences and benefits in either form of ownership. Therefore, it is important to identify the consequences related to things such as: taxes, property management, tenant issues, diversification and capital requirements.
Not offered by the Wise Tree Group
Offered by the Wise Tree Group
HIGHER MINIMUM INVESTMENT & INVOLVEMENT
LOWER MINIMUM INVESTMENT & INVOLVEMENT
Direct real estate investing, investor purchases property themselves, responsible for total downpayment, signs mortgage, hires property management, lawyers, contracts and other professionals as needed.
Direct real estate investing, investor purchases property themselves, responsible for total downpayment, signs mortgage, does their own property management and needed maintenance.
Passive real estate investing, investor owns a portion of the property which is managed by a professional group that takes care of the day-to-day responsibilities and activities for the property. Â Uses professional property management company manages multiple relationships to ensure that the investment performs at its optimal levels.
Investment in a property with an operating partner who handles the day-to-day & provides oversight & management.
Passive Vs Active Ownership
The decision between the way investors hold/own property in many situations is almost as important as the actual real estate and investment strategy. It is important to identify the consequences related to some of the following such as: taxes, property management, tenant issues, diversification and capital requirements.
Not offered by the Wise Tree Group
HIGHER MINIMUM INVESTMENT & INVOLVEMENT
Direct real estate investing, investor purchases property themselves, responsible for total downpayment, signs mortgage, does their own property management and needed maintenance.
Direct real estate investing, investor purchases property themselves, responsible for total  downpayment, signs mortgage, hires property management, lawyers, contracts and other professionals as needed.
Offered by the Wise Tree Group
LOWER MINIMUM INVESTMENT & INVOLVEMENT
Passive real estate investing, investor owns a portion of the property which is managed by a professional group that takes care of the day-to-day responsibilities and actives for the property. Â Uses professional property management company, manages multiple relationships to ensure that the investment performs at its optimal levels.
Investment in a property with an operating partner who handles the day-to-day & provides oversight & management.
Realize Your Investing Goals
Learn More
See how investing in real estate can help you reach your financial goals and put you on the path of generating wealth.
Schedule A Call
See how investing in real estate can help you reach your financial goals and put you on the path of generating wealth.
FAQS
Have questions? Visit our FAQs page for answers to some of the most commonly asked real estate investing questions.
Learn More
See how investing in real estate can help you reach your financial goals and put you on the path of generating wealth.
Schedule A Call
See how investing in real estate can help you reach your financial goals and put you on the path of generating wealth.
FAQS
Have questions? Visit our FAQs page for answers to some of the most commonly asked real estate investing questions.