If you analyze closely you will agree that "Share" program has all the advantages which are typical of real estate ownership, but, by locating a long term tennat, eventual buyer, and eliminating the creditor, headaches of the repairs and management, the problems traditional to real estate are practically taken care of. Thus, it offers a good relatively less risky and stable cash flow producing investment for a longer time frame.
Some of the advantages are listed below:.
Since all your investment is virtually 100% backed by tangible immovable property, it provides you maximum security. These durable hard assets, which are not subject to theft or loss, shall serve as some thing to lean on at the time of a problem. Compared to other intangible investments which as based on certain paper or goodwill, this is derived from some thing solid and valuable. We all know that at the time of economic down turn these intangible or paper investment disappear rather quickly.
Predictable and Steady Cash Flow:.
Program Share generates cash flows from the monthly payments by the resident co-owners which are quite predictable and steady. Fluctuations in the cash flows, which are typical of many businesses, pose special problem of planning and some times require idle reserves for contingencies. This stream of cash flows from monthly payments will enable management to make quarterly distributions or recycle the money in similar projects. A large portion of this cash flow will not be immediately taxable which makes this even greater value.
As we discussed earlier, the trend of inflation is expected to continue, to the extent that it is almost a certainty. Sources at the U.S. Department of Commerce tell us that $10,000 worth of goods and services in 1960 cost $26,432 by 1980 and at the same rate of inflation would cost $69,865 in year 2000. Doesn't it sound amazing? Loaning your non emergency cash to the banking system at certain interest rate just does not make sense because of the loss in the purchasing power in the long run.