The Realized Team’s Picks
What Is a Limited Partnership in Real Estate?
When you want to invest in real estate but don't want to take on all of the risks, you should consider investing in a real estate limited partnership (RELP). This type of partnership involves gathering funds and assets from numerous investors before buying, developing, and selling properties. While there are some clear advantages of investing in a limited partnership, you should understand what this investment entails before putting your money towards it.
Do Realized Gains Count as Income?
Investing in real estate can help make your portfolio more diverse while also giving you opportunities to seek returns and income. If you invest in a property and eventually sell it, your profits may be considered capital gains, which can typically be taxed. However, there is a difference between capital gains that are realized and ones that are unrealized, which you should be aware of before investing in real estate.
What Is a Real Estate Investment Group (REIG)?
If you've become interested in real estate investments because of the potential for high returns, you'll find that there are many different types of real estate investments at your disposal. One such investment is a real estate investment group, which gives you the opportunity to invest in real estate without needing to actively manage the property.
What Is a Bondable Lease?
Commercial real estate investors need to consider many factors when choosing a property, tenants, and the type of lease to offer tenants. Depending on the situation and property characteristics, using a gross lease or one of the net lease options, like a double or triple net, may make more sense.
What Are Realized Losses?
Gains and losses are part of life, certainly an inevitable aspect of investing in real estate (or anything else). How investors manage those gains and losses is part of the strategy. When an asset is worth more than you paid for it (your basis), you have a gain, and when it is worth less than your basis, you have a loss. However, that gain or loss is unrealized unless you dispose of the asset. Also, gains and losses are categorized by the IRS as short- or long-term.
What Is Political Risk and How Can I Measure It?
At Realized Holdings, we write about risk on a frequent basis. There are all kinds of risks that impact investments, such as business risk, credit risk, general market risk, and systematic risk.
What Is a Step-Up Lease?
A step-up lease is a lease agreement that comes with increases embedded into it. Such provisions are sometimes referred to as escalator clauses. From the landlord's perspective, it makes sense, particularly when the agreement term is lengthy and rental rates are volatile. A step-up can accompany a gross or net lease and may trigger a specific dollar amount, percentage, or indexed increase. The tenant may also benefit if the addition of a step-up provision facilitates their ability to acquire a lease of the preferred length. Plus, it allows for longer-term planning.
Ways To Evaluate a Rental Property Investment
Let’s say you’ve come across a potential investment, one that involves the purchase of a rental property. And let’s also say that the individual making you aware of this investment tells you it’s a sure thing, offering great returns with little risk. After all, it’s real estate, right? And real estate is supposed to be a solid investment.
What Is After Repair Value (ARV), and How Is It Calculated?
The After Repair Value (ARV) is the estimated value of a property after repairs, remodeling, or improvements are completed. Determining the ARV of a property is one component in deciding whether it’s a good investment. If the potential acquisition has a significantly greater ARV (customarily at least 25 percent) than the cost of buying, holding, repairing, and selling it, then it makes sense.
What Is Longevity Risk and How Can You Mitigate It?
Every so often, the media will announce that Americans are living longer than ever before. It’s true that recent headlines report shorter life spans because of COVID-19. But over the very long term (i.e., a 50-100 year big picture), people are living longer, thanks to improvements in medicines, medical technologies, and lifestyle choices.
