Advantages & disadvantages of investing in real estate with friends

Investing in real estate has always been a popular way to build wealth and generate passive income. Traditionally, property investments are often made by individuals or business entities, but more and more people are exploring the option of buying property with friends as a joint investment. This can be an attractive option for those who want to pool their capital, share risk and gain access to properties that would otherwise be out of their reach. In this article, we will explore the benefits and considerations of investing in real estate with friends.

The Benefits of Investing in Real Estate with Friends

1. Shared costs: One of the most obvious benefits of investing in real estate with friends is sharing the financial burden. The cost of buying, maintaining and managing property can be significant, and sharing this with others can reduce the financial strain.
2. Access to Capital: By co-investing with friends, people with more limited financial resources can access real estate investments that would otherwise be out of their reach. This opens the door to investment opportunities with higher potential returns.
3. Diversification: Sharing ownership in multiple properties with friends can lead to better diversification of the investment portfolio. This reduces the risk associated with having all the capital invested in just one property.
4. Shared Management: The tasks and responsibilities related to real estate can be shared between friends, which can result in a shared effort and less individual workload.
5. Social Aspects: Investing with friends can make the investment experience more enjoyable and strengthen social ties. It can also lead to better communication and cooperation in property management.

 

Important Considerations when Investing in Real Estate with Friends

While investing in property with friends has many advantages, there are also important considerations to be made:

1. Legal Structure: It is essential to choose an appropriate legal structure for the joint property investment, such as buying in undivided ownership or working through a partnership.
2. Financial Agreement: It is crucial to draw up financial agreements that clearly define the financial contributions of each partner, the distribution of profits and losses, and the responsibilities of each member.
3. Exit Strategy: It is wise to plan an exit strategy in advance in case one of the investors decides to sell its stake or if disputes arise that lead to dissolution of the partnership.
4. Maintenance and Management: Property management, including maintenance, rent collection and decision-making, should be carefully considered and regulated to avoid potential conflicts.
5. Legal and tax advice: It is highly recommended to seek legal and tax advice from professionals experienced in joint property investments to ensure that all aspects of the investment are handled correctly.

Immotokens: your partner to purchase real estate with friends (or others) as an investment.

For all the above considerations, Immotokens offers a solution in its unique formula. Thus, we guide you in choosing the right structure, have good agreements and accompany the final sale. You can also count on us for maintenance and management!

We have two unique investment formulas:

1. Co-invest: In which investors from €100,000 become direct owners at the notary.
2. Immotokens: A lower entry option where investors invest from €1,000 indirectly in real estate through tokens representing their share in the real estate project.

Thanks to such innovations, group purchase of real estate is more accessible and flexible than ever before, making it an attractive option for both new and experienced investors.

Want to invest only with your friends? Take advantage of our start-up guidance and all-in platform. We will be happy to help you.