Even amid a global pandemic, the state of Florida is still one of the best places for real estate investors both at the national and international level.
While other states are still suffering from economic setbacks, thriving cities like Tampa, Jacksonville, and Orlando are still considered some of the best places to buy rental properties in 2021.
In this article, you will discover all the advantages of land trusts for real estate investors in Florida.
Land Trust in Florida – The Essentials
Florida is one of only two states nationwide that has passed specific legislation concerning land trusts (Florida Statute Chapter 689).
When it comes to real estate investments, a land trust can be explained as an “entity” used to hold title to real estate. In essence, a land trust is holding real property by contract.
Land trusts offer the much-needed versatility real estate investors need to purchase, hold, sell and manage real property.
Under land trusts, investors can hold not only real estate but also real estate-related assets (e.g., real estate notes), deeds and financial agreements.
What Are the Benefits of a Land Trust for Real Estate Investors in Florida?
Privacy to Beneficiaries
The privacy aspect is one of the most attractive factors that encourage real estate investors to rely on land trusts in Florida, especially when it comes to preventing potential lawsuits.
All the beneficiaries of a land trust in Florida are private, which means their identity cannot be disclosed unless a court order is present.
The name displayed on a land trust is not attached to the parties involved in the trust. Hence, no sensitive or personal information of its trustor or beneficiaries is public and this can discourage creditors and other parties from pursuing them with lawsuits.
Besides, sellers are more inclined to ask more for a property when they know the purchaser has plenty of resources, so real estate investors may want to preserve their identity using land trusts during such type of negotiation.
Land trusts are also a useful tool when a real estate investor is trying to assemble adjoining land to satisfy a certain purpose, such as building an ocean-front condo or a golf club.
In comparison with ownership transfers involving deeds, typically, complex and time-consuming- transferring interest of real property held in a land trust is much easier.
Plus, a land trust permits the owner to transfer the title of a property while preserving his/her privacy, simply by privately transferring the interest in the trust either by sale or by gift.
Hence, the transaction and all related private information (e.g., the transfer price, the buyer’s name, etc.) remain confidential.
Ease of Ownership in Investments Involving Multiple Partners
On many occasions, real estate investors in Florida work with business partners. A well-structured land trust can help two or more parties investing together in a property by avoiding issues among them.
Typically, when real estate investors want to buy a property together in Florida, they set up a partnership with an agreement at the state level.
Nonetheless, real estate investors can use a Florida land trust to structure their business arrangement and set up each party’s obligations and benefits as trust beneficiaries.
Plus, as land trusts are not filed with the state of Florida, the identity of the business partners remains confidential and everyone can save a significant amount of money that would be utilized to pay fees.
Land trusts are one of the many tools real estate investors can use as an extra layer of asset protection.
For example, a judgment against a beneficiary of a property held in a land trust will not affect the legal title of the property, as it is held in land trust by multiple partners (co-beneficiaries).
Plus, the beneficiaries in a land trust are not individually liable for any debt(s) or financial obligation(s) of the land trust.
However, real estate investors must be aware when using land trusts exclusively for asset protection, as there are certain spots that can be exploited by creditors and other parties. In this sense, we strongly recommend you seek guidance from an expert attorney in Florida.
Waste no Time and Money When Setting Up a Land Trust in Florida
A competitive real estate market like Florida requires a strategic approach from investors. Attorney Romy B. Jurado Esq. can assess your situation and create strategies to help you succeed.
Do not waste time and money with uncertainty. Call Attorney Romy B. Jurado at (305) 921-0976 or send an email to Romy@juradolawfirm.com to schedule a consultation today.