• Owning real estate for passive income is one of the biggest myths in in

    From a425couple@21:1/5 to All on Fri Oct 27 12:58:35 2023
    XPost: or.politics, alt.economics

    from https://moneywise.com/investing/real-estate/owning-real-estate-passive-income-myths-investing-how-plotify-can-make-it-work

    Owning real estate for passive income is one of the biggest myths in
    investing — but here’s how you can actually make it work
    Too many investors slowly watch their passive-income plan become a
    part-time job.

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    Vawn Himmelsbach
    By Vawn Himmelsbach
    Oct. 04, 2023

    5 min read

    The notion of generating passive income through real estate is extremely enticing: wealth, without all the work.

    It seems straightforward: You borrow money, buy a property and rent it
    out. The tenant helps you pay off the mortgage, while you bring in a
    little extra cash. As you build equity, you can start the cycle again,
    scaling your real estate portfolio as you go. All the while, you can
    benefit from the tax incentives of real estate investing.

    While it’s a popular plan — and owning real estate does have potential
    to provide a high rate of return — many first-time real estate investors don’t yet realize this kind of passive income isn’t truly “passive.”

    You need to find reliable tenants who pay their rent on time. There’s insurance, property tax and asset management to consider. And you’re responsible for any repairs or maintenance required on the building; if
    a stove goes kaput, you’re out of pocket.

    Not everyone can afford to turn their passive income plan into a
    part-time job — so how do savvy investors make it work?

    Skip the learning curve
    Accredited investors are able to tag in support through services like
    Plotify, a global, end-to-end property investment and asset management platform. The benefits start from the very beginning of the process:
    finding the right properties to invest in.

    To secure the biggest return, it makes sense to purchase real estate in
    an up-and-coming market with potential for high appreciation. Others
    might be more focused on rental income. Plotify curates assets to help
    you achieve your investment goals.

    However, if you’re not familiar with the market fundamentals, drivers
    and trends in a range of potential areas, it could take a significant
    amount of time to track down the right investment for your budget and
    risk tolerance.

    Many investors end up investing close to home because they’re most
    familiar, but this limits geographic diversification and can limit
    upside while increasing concentration risk. To navigate this, Plotify
    provides insights that help you decode current macroeconomic conditions
    and market level commentary that helps you select the best assets and
    locations for your risk appetite.

    Plotify focuses on single-family rental properties (SFR) in
    up-and-coming second- and third-tier markets with positive net migration trends. It chooses properties based on its forecast of yields, long-term
    rental potential and stability of demand in areas with strong growth, a skilled, growing workforce and proximity to hubs of innovation.

    While potential investors should consider their own individual needs and preferences, the company selects and inspects every site to ensure it’s
    a viable and attractive option. Currently, Plotify is acquiring
    properties in the U.S. and U.K.

    Cut down time, expense and effort
    Investing in just one single-family rental property can take months of
    tedium, not to mention the high transaction costs. According to Plotify,
    it takes 46 days on average to close a purchase loan on a single-family
    rental, with an average of around $10,000 to $20,000 in total closing costs.

    Meanwhile, Plotify minimizes costs and maximizes convenience by bundling
    the odds and ends of a given investment into a simple “Plot.”

    A Plot is a single residential property, owned by an individual
    single-purpose legal entity, with all of the related services built
    right in — including financing, insurance, property management and
    tenancy arrangements. A single investor wholly owns a single Plot, with
    an optional, no-application and non-recourse loan. As a direct owner of
    the Plot, you can benefit from Plotify’s institutional-grade tax
    optimization when you choose to exit.

    Not only does this approach take many of the convoluted considerations
    that go into buying a property and trim them down into a simple package,
    you can also sell that package at your leisure. Plots can be bought and
    sold online at any time, from anywhere in the world, via the Plotify Marketplace.

    Get on top of hidden costs and hassles
    As previously mentioned, anyone leasing real estate will still have to
    deal with ongoing costs such as insurance, property taxes and
    maintenance — as well as expensive surprises in the form of repairs or
    unpaid rent.

    Even when you’re lucky and everything is going right, finding tenants, collecting checks and arranging repairs and maintenance can be
    time-consuming and take your time away from other opportunities.

    In the Plotify model, insurance expenses are included with the Plot and
    paid on a monthly basis, and all property tax and management accounting services are taken care of. Plotify has also partnered with recognized
    local and national property managers to handle the day-to-day management
    of each property and its tenants. Because of its scale, Plotify says, it
    can negotiate discounts with leading service providers and pass the
    benefits through to the investor.

    Crucially, each Plot comes with a reserve fund, which provides for
    unexpected expenses to smooth your returns and avoid having to pay in additional capital every time something needs to be done to the property.

    In addition, many investors struggle to keep track of bills and expenses
    and can be easily confused when it comes time to file taxes related to
    the property. Plotify provides full transparency into each line item of
    income and expenses with detailed monthly and quarterly reporting.

    Plotify uses Deloitte for the accounting of each Plot and provides
    investors with a year-end tax packet to make filing easy for investors.

    All of these services are built into the cost structure of the platform, allowing you to invest directly in individual properties via an LLC
    without having to manage those properties directly. With full control,
    all you need to do is decide which of the carefully curated
    opportunities are right for you and how long you want to hold them.

    So while passive income is never truly “passive” when it comes to real estate, platforms like Plotify take so much of the hassle out of the
    equation you can get tantalizingly close.

    About the Author
    Vawn Himmelsbach
    Vawn Himmelsbach
    Freelance Contributor
    Vawn Himmelsbach is an experienced freelance writer and editor since
    2001. She has contributed to various publications, such as The Globe and
    Mail, Toronto Star, National Post, CBC, Moneywise, Zoomer, Wheels, CAA Magazine, Explore Magazine, Canadian Traveller, Travelweek, WestJet
    Magazine, Ottawa Life, Flare, and Consumer Reports. In addition to
    these, Vawn is a senior contributing editor of BOLD Magazine, a custom
    content writer, and copy editor. Moreover, she has previously worked as
    a freelance page designer for Metro News and is a co-founder of Chic
    Savvy Travels, a travel website for women.

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