If you've been caught in the 'traditional' real estate investing grind for long enough, you're probably feeling exhausted—and fed up with what originally started as a hopeful path to financial freedom.
If you're looking to restructure your real estate portfolio with an emphasis on simplicity, you've likely already researched some of the main contenders and found them lacking. However, there's an option that was developed specifically for tax-weary real estate investors like you! If you want to enjoy truly passive real estate investing, then an UPREIT is the only sound choice to proceed with.
Letting Go of Your Stress—and Your Portfolio
One of the first options you came across was likely that of the 1031 exchange. However, you may already be aware of why this won't solve any of your pain points.
- A 1031 exchange merely allows you to trade one set of property problems for another.
- It doesn't allow you to escape the workload or burdens of your current rental properties.
- A 1031 exchange also comes saddled with oppressive rules and regulations on the timeframe of the exchange.
If your goal is to nip stress in the bud and rediscover why you loved this asset class in the first place, then a 1031 exchange won't meet your needs. However, if you want to maintain long-term cash flow and the income you enjoy from real estate investing, then a sale isn't ideal.
You Don't Have to Take a Loss
If you've reached this point of exhaustion with the real estate market, you'd probably be willing to sell your entire portfolio off today—if you didn't have to take a heavy loss in capital gains tax.
Unfortunately, for real estate investors in Oklahoma, Oklahoma has a pretty hefty tax structure when it comes to capital gains. If you're in the top tier for appreciation, you could potentially be handed a bill for 28% of what you've earned—shaved right off the top of your hard work. Plenty of 'real estate gurus' like to talk about real estate deals and their tax benefits—until it comes time to sell. Then the fun stops.
Thankfully, you don't have to bow to a hard sale that requires handing over what you've worked for to Uncle Sam: you can enjoy truly passive real estate investing with an UPREIT structure—tax-deferred.
Keep Your Earnings—and Ditch Responsibility
There are very few methods of earning income from real estate that truly represent a passive investing experience. However, the right Umbrella Partnership Real Estate Investment Trust (UPREIT) is one of them.
A well-managed, transparent, and responsible UPREIT not only allows you to skip the hassle, but it also allows you to continue enjoying all the benefits of investment property—without the work! Passive investors who rely on this incredible vehicle for financial freedom no longer have to question if their returns will be stable enough to support their lifestyle without hands-on management.
- UPREITs are managed independently to generate continuous, long-term investment income from real estate.
- Investors can enjoy the returns from a Real Estate Investment Trust without any of the hands-on work.
- Properties are held as part of the Umbrella Partnership; investors receive operating units.
- These operating units are tax-deferred until an investor decides to 'cash in.'
The entire UPREIT structure was first conceived by tax-weary investors like you who wanted an alternative to traditional rental properties without heavy losses. If you're ready to get out from under your portfolio—and start putting it back to work for you—then passive real estate investing via an UPREIT is the smart choice.
'Should I Choose an UPREIT or a REIT?'
We've already answered this question in a bit more detail in another article we posted, but if you'd like to skip an incredibly informative read, the short version is this:
- You should choose an UPREIT if you want to enjoy tax-deferred holdings.
- You should choose an UPREIT if you already have properties to contribute.
- You should choose an UPREIT if you have an appreciated portfolio to convert.
- You should choose an UPREIT if you want to realize even greater long-term returns.
It's not that a 'regular' Real Estate Investment Trust is a bad thing—but if you want elite returns and you already have an appreciated portfolio, then an UPREIT structure will simply benefit you more as a real estate investor.
Get More Out of Passive Real Estate Investing
- More income
- More stability
- More diversity
- More flexibility
- More relaxation
Coupled with less stress, less concern, and less taxation, it's time to learn more about why an UPREIT can help you transition from being an active investor to a passive investor. You'll be amazed at how much better you feel when you no longer have to collect rent to see returns from residential real estate!
To learn more about why it's time to transition away from the 'landlord life,' download our free guide: Let Freedom Ring! Then, get in touch with the investing experts here at The Peak Group to learn more about the kind of financial freedom you can enjoy with the Peak Housing REIT!
Posted by The Peak Group on October 8, 2020