Planning for and taking care of money gets harder as it grows. Rich families have to think deeply about their heritage and shared values as they plan their wealth. They also have to think about a huge number of details and strategies to keep their wealth safe, invest it.
Passing it on efficiently and insuring their loved ones are ready for the responsibilities that come with inheritance is also important. A family office might be the answer when everything seems too much. A family office with skilled workers can help create a clear picture of what the family wants to achieve, improve communication, and pass on wealth from one generation to the next.
What Is a Family Office?
Family office real estate has become an increasingly popular investment opportunity for many families. These private wealth management firms serving single-family or extended-family assets have seen a growing demand for real estate investments. This is because of the unique benefits that come with investing in a physical asset such as real estate. Read on to learn more about how you can diversify your family office portfolio with commercial real estate.
Benefits of Family Office Real Estate
Investing in real estate can give you a steady flow of income and allow your money to grow over time. Because the investment is stable, family offices can spread their holdings and lower their risk while still earning money. Also, real estate investments don’t have the same risks of volatility as other types of investments. This makes them a better choice for protecting your wealth over the long run.
Real estate investments offer a number of tax advantages that family offices can take advantage of. For example, they may be able to defer taxes on gains from their investments and may be eligible for other tax incentives such as depreciation. In addition, family offices can also benefit from the liquidity of real estate investments. They can sell them when market conditions are favorable for quick profits.
Real estate investments can also provide stability and income to a portfolio. They tend to hold up better during economic downturns. This is especially true of properties that are leased out or managed by a property management company. Investing in real estate through family offices is a great way for families to diversify their portfolios and reduce risk.
Family Office Advisors Offer Success
Family offices can benefit from the expertise of professional real estate investors. These experienced investors provide more insight into the market and help identify potential opportunities with greater return potential. Professional advisors also bring an understanding of how different markets affect one another, allowing family offices to better allocate their assets and maximize returns.
It is beyond the scope of any one professional advisor to give all help and services very wealthy families require. A group of professionals from the legal, insurance, investment, estate, business, and tax fields must work together.
Responsibilities of Family Office Advisors
A family office often uses an integrative method to perform high-level financial planning. Family offices offer services that include managing assets, cash, risks, finances, lifestyles, and more. These services help clients navigate the complicated world of wealth management.
Legacy Planning
A comprehensive wealth transfer plan must consider various aspects of a family’s wealth. This will likely include managing business interests, estate disposition, family trusts, philanthropic goals, and governance. To create an effective plan that reflects the family’s legacy, family offices collaborate with a team of advisors from each of these disciplines.
Lifestyle Management
Many family offices act as concierges for families, managing personal affairs and addressing lifestyle needs. Their services may encompass background checks for staff, personal security, managing vehicles like aircraft and yachts, and travel planning. Of course, they also work to optimize of business affairs.
Investment Management
A family office may be responsible for the management of investment portfolios, the acquisition of commercial real estate, and the management of property. In addition, it might handle private equity deals, hedge fund investments, and venture capital investments for a single family.
Family Wealth Education
The job of a family office is to teach the younger members of the family how to handle money properly based on the family’s values. The family office aims to help the next generation understand how much money they have and what it takes to take care of it. With the right training, a family office can help keep the family unified and prevent different generations from fighting over money.
How Can STRATAFOLIO Help You Manage Your Family Office?
STRATAFOLIO can help you understand and manage all these complex parts of family real estate investment. Many of our customers are in the process of taking over a family office as their parents retire, and want a comprehensive software that can keep track of their family’s investments. Contact us for a free demo to see how we can help your family office succeed with a commercial real estate portfolio.
