Real Estate Ventures: Why a Limited Partnership Makes Sense

Diversification of your investments is important for many reasons, and many investors are taking a closer look at what real estate investments have to offer. Real estate is a unique investment option that enables you to leverage the purchase of your investment with a mortgage while also enjoying the tax benefits associated with depreciation, mortgage interest, operating expense deductions and more. The property may appreciate in value as well as provide you with monthly rental income. However, you may be aware that there are some risks for investors as well. With a closer look at real estate investing through a limited partnership, you may see why this is an ownership structure that makes sense.

Home Value Ideas to Protect Your Pocketbook in the Long Run

Pool Your Funds With Other Investors

A limited partnership is established with one or more general partners as well as one or more limited partners. These partners will each contribute funds into a general pool, and their ownership interest in the partnership will generally be determined by the amount of their initial investment. This gives you the ability to purchase better investments with a greater potential return with limited funds. It also gives you the ability to purchase investments now rather than to wait until later when you have more funds available to invest.

 

A Great Tax Shelter

A limited partnership through Jakob Pek Fund will not decrease your tax benefits associated with real estate investing in any way. You will essentially own a percentage of the property under the real estate limited partnership, and you will share in the profits as well as the tax benefits associated with the investment. This includes being able to write off operating expenses and depreciation.

 

Reduced Risk

One of the most significant benefits associated with a limited partnership is that your exposure to risk is considerably reduced when you are a limited partner. Limited partners will not have any control over which property is selected or how that property is managed, but the limited partners also cannot lose more money than they initially invested. They also are not liable for any debts associated with the property, including the mortgage.

 

If you are thinking about investing in real estate in the near future, you could consider taking full ownership of a property. This is one option, but it does have its downsides. Another option that is preferred by many who are concerned about risk and loss is to invest in real estate through a limited partnership. You can begin learning more about this as an option for you in the near future.

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