As an investor in rental real estate, it’s likely that you already know how the financing of new deals can be tricky – particularly if you don’t have an ample amount of cash available to use for a down payment and / or any of the necessary renovations. These obstacles can sometimes be overcome by bringing in a partner to your venture.
In fact, financing property is typically the number one obstacle for real estate investors to overcome. This is the case regardless of whether you intend to hold the property and use it as an income-producing unit, or to renovate and “flip” it for a quick profit.
Depending on how your partnership is set up, you and another individual (or company) may share equally in all of the expenses, as well as the potential risks. So, for these reasons, going into your real estate investments with a partner can certainly be enticing.
But, before you move forward with any type of a “shared” real estate deal, there are some items that you need to consider. For instance, in addition to sharing in the costs, you will also be sharing in any of the profits that the property makes.
It is also essential that you and your partner not only compliment one another (i.e., you both bring something valuable to the table), but that all parties involved know exactly what their expectations will be.
Ultimately, real estate investment partnerships should be treated just like any other type of business venture in that you should have everything in writing. It is also recommended that you work with a real estate attorney when setting up the parameters of the partnership.
If you intend to hold your real estate investment(s) for the purpose of generating monthly rental income, you should also have a good idea regarding just how much time managing and maintaining properties can actually take – and if doing so will take your focus off of other important matters, you may want to consider handing these tasks over to a property manager.
If you own (or you soon plan to purchase) rental real estate in Orlando and / or the Central Florida area, give us a call and find out just how much an experienced local property management team can add to your bottom line.