Significant tax law changes were established in 2012, changing the way investment opportunities were offered in the real estate industry. When these crowdfunding tax law changes went into effect, it lowered the barrier of entry to make real estate investing a possibility for people who don’t know much about the industry.

How Things Shifted with the New Tax Laws

Before these tax laws were implemented in 2012, it was difficult for new investors to break into the real estate investing industry. People who wanted to participate needed to have a personal connection with other investors or property owners. Additionally, investors needed to bring significant funds to the table. Most of the time, only seven-figure investments were considered.

In 2012, the crowdfunding tax law changes opened the door so that investors could get started with much less. Instead of facing the challenge of footing the bill for an entire commercial real estate purchase, people now have the option to join a shared pool of investment funds. Combining the money from many investors gives the group a stronger buying power that can be used for excellent investments.

Investors who choose to participate through crowdfunding own a small amount of equity in the property. For REITs, this ownership comes without voting rights or management responsibilities. With Private Equity Partnerships, the owners have more advantages including tax ownership and the ability to transfer the assets. Either way, this shared-purchase helps to offset the risk of the investment. With high-profit potential and shielded risk, it is easy to see why this investment solution is gaining in popularity.

Staying Current with Crowdfunding Tax Law Changes

If you don’t have a profession in the finance or investment industries, then it can be hard to keep up with all of the changes that happen through the year. The best solution for inexperienced investors is to lean on the experience offered by a team that understands all aspects of the investing, tax laws, and real estate industries.

For example, you can find a great crowdfunding group to join, but it is still smart to use the services of an accountant and financial advisor. As a new investor, you don’t have to spend hours reading through the laws and changes in the industry. Instead, you need to build a good team that can guide your decisions and offer advice along the way.

It seems like the business world and investment opportunities are always changing, which is why you need to stay abreast of the new details. A good investment firm will stay current with the industry and update you when things are shifting. Not only will your investment managers shift the portfolio of properties, but you can also access information that might help you determine the right timing for future investments.

Crowdfunding tax law changes don’t have to be stressful when you are working with a good team. At First National Realty Partners, our goal is to provide the knowledge and information you need to stay current in the industry. If you are interested in learning more about commercial real estate investing, then we invite you to contact our team for details.

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