subject: Is A Real Estate Partnership The Appropriate Investment For Me? [print this page] Is A Real Estate Partnership The Appropriate Investment For Me?
Investing in real estate is considered a way to make cash. Those who cannot do it on their own might consider a real estate partnership, but financial gains will depend on the kind of investment and the members of the partnership. There are several things individuals should pay attention to prior to getting involved in a real estate partnership; if you are considering it, make certain you do your research.
If you're thinking about a real estate partnership, be sure, foremost, that your partners are financially sound and dependable. Going into business with a relative or long-time friends is not always a wise business choice. Business partnerships should be financially helpful to all parties involved. For example, will you make a return on your investment? Can you wait a while to make back your investment? Are the risks involved acceptable to you? What impact will the investment have on your taxes? How much of your funds will be tied up in the investment, and for how long? If the answers to these questions still makes you to believe that the investment makes good sense, then going ahead is okay.
Be sure that you and your partners all have the same strategy for your investment and business partnership. Partnerships involve dozens of factors and should not be set up without the assistance of a business attorney. Partnership agreements prepare you for the majority of the issues that will arise in your business, including but not limited to: the reason for your investment, the structure of your company's management, all tax considerations, what will be done with any profit, insurance, and how disagreements will be managed.
Lastly, real estate investments are dangerous. The end result of your investments and hard work might yield little or no financial gain. Real estate market fluctuations and the unpredictability of the economy can lead to drastic drops in income over short periods of time. For this reason, it is best to keep in mind the old adage "buyer beware". Real estate investments do not make great primary income sources, make certain that this does not apply to any member of your partnership.
If you have carefully thought through all of the concerns raised above, then you will be prepared for all difficulties of partnership, risk and financial return on investment Going forward, you will need to hire both a CPA and a lawyer to consult on tax issues and partnership agreements. If you've thought of all the concerns raised here, you should be prepared for anything.
