Having a silent investment partner can be critical in getting a real estate investment started, especially if you're an investor with a lower budget. Silent investors, however, are more complex than their name suggests. Here is what they can have a say over and how they can ensure their voice is heard.
What Is a Silent Investment Partner?
Think of a silent investment partner as someone who has money to invest but lacks the time needed to keep up with the functioning of real estate investment. They can help buy an investment property, but they're usually not responsible for finding tenants or keeping up with maintenance requests.
Benefits of Being a Silent Investor
Silent investment partners enjoy limited legal and accounting responsibilities, as well as a less time-consuming investment strategy. However, these limited responsibilities don't mean that a silent investment partner has no input on the investment.
The Importance of a Partnership Agreement
To protect both parties in an investment strategy, there should be an agreement covering the rules and expectations of the partnership. Here are some components you should consider including in this partnership agreement:
Percentage of ownership and how losses and profit will be divided
Length of partnership
Decisions the silent investor can influence
Should the Silent Investor Be Heard?
This question can be tricky and will vary from partnership to partnership. Usually, a silent investor is a part of the decision-making process regarding what and how an investment takes place. They can also act as an advisor to management decisions rather than dealing with them directly. The most crucial aspect of what a silent investment partner can voice their opinion in is the agreement and expectations set in the partnership agreement, which is why it's so important.
How to Be Heard as a Silent Investment Partner
One of the best things a silent investor can do to ensure their voice is heard in the future is to establish a clear line of communication and a friendly relationship with investment partners early in the partnership. It's also essential to make your expectations explicit in the early stages of a partnership, especially about your opinions.
At Regalway Homes, we help investors make the right real estate investment decisions based on their situations. By working with us, you get a personalized investment strategy and the opportunity to partner with others to expand your investment portfolio. If you are interested in property investment but may need a silent investor, visit https://www.regalwayhomes.com/services to book a consultation. We can introduce investors and help lay out the terms of your arrangement.