What Does It Mean to Buy a Property In a Trust?
Sometimes a real estate investor might decide to buy a property in a trust. Understanding what a trust is and how it works can help you decide if it is something you want to set up for your real estate investing business.
Do I Need to buy a property in a Trust For Investing?
In the real estate methods that I teach where you can become a six-figure investor without using your own money, it isn’t necessary to purchase your investments in a trust. With more experience, it may be something you can explore. Although, it isn’t anything major to stress out about. In the end, it is important to understand what a trust is.
What is a Trust?
When you purchase an investment property in a trust, it means that the trust owns the property, not you personally. However, when you are named the person on the trust, you still have full control of the property.
Different Types of Trusts
For purchasing a real estate investment you will have a living trust. Setting up a living trust means that you, as the trustee, have control of the property. Then, the trust will define who will take over your property if you become deceased. There are two options.
A revocable trust means that the owner (or grantor) of the trust has full control of changing the trust. It allows the grantor to name and change beneficiaries and other terms of the trust.
What makes an irrevocable trust unique, is that it can only be changed by the beneficiaries. This means that you, as the grantor or owner, would not be able to change the terms of the trust. In the type of real estate investing I teach, this type of trust would not be beneficial because you won’t to be able to make any changes you see fit. Typically, an irrevocable trust is done for inheritance purposes.
To learn more about investing in real estate and gaining your financial freedom, I invite you to come to one of my live events or download my free Investor kit. Start learning the methods that have made me a multi-million dollar real estate investor.