Luxury Home Rental Information
Luxury home rentals are an incredible investment vehicle for people who want the cash flow from rental income plus the appreciation of the property over time. If you don’t have the experience, time, or desire to manage a rental on your own, investing with Gatsby gives you access to our team of professionals who will manage all of this for you.
Since we pool capital from multiple investors, you can own a share of a multi-million-dollar property without the burden of funding the project on your own. With a low minimum investment, you can own a piece of a luxury rental property in the elite Los Angeles real estate market. You get to benefit from all the advantages that come with this type of investment, including tax benefits, passive rental income, and property appreciation.
Vacation home rentals have been growing in popularity in recent years. Actors, athletes, musicians, business leaders, and other wealthy individuals who travel to Los Angeles often prefer to rent a home while they’re in town rather than staying in a hotel. Luxury home rentals give these visitors the chance to enjoy a lifestyle that suits them while making themselves at home in LA for however long they decide to stay.
Luxury home rentals have also become popular among wealthy locals who prefer the simplicity and flexibility of renting over owning. They recognize that owning a home comes with certain responsibilities, like time-consuming maintenance and a substantial financial commitment. And with their jet-setting lifestyle, it often makes more sense for members of this group to rent rather than put down firm roots in any one place.
The Los Angeles luxury rental market experiences consistently high demand and comparatively low supply. This drives growth in both rental rates and property values.
This is a five-year investment, with the option to renew the investment every five years. With Gatsby, you’ll receive your share of the rental income each quarter. You’ll have the option to reinvest the funds into new projects, which will quickly build and diversify your real estate holdings.
The benefits of investing in luxury home rentals
Stability.Real estate is less volatile than the stock market and has historically outperformed the S&P 500.
Cash flow.Tenants pay monthly rent to help cover property expenses and can provide profit to the investors.
Amortization.Tenants help pay down the mortgage debt, which increases your equity and can ultimately create long-term wealth.
Appreciation.Investors benefit from the growth of real estate values over time.
Tax advantages.Claim deductions on your income taxes for your real estate holdings.
Deal-by-deal control.Unlike many other real estate crowdfunding investments, Gatsby allows you to view the property details (including the address) and financial breakdown for each project so you can choose which properties you want to invest in.
Ownership of a piece of LA real estate.With Gatsby, you don’t just own debt-equity; you actually own a stake in the underlying real estate.
The process of luxury rental investing
At this stage, the construction of the property has already been completed. We have fully furnished the home and appraised it. We then advertise the property for rent until we find the right tenant. Our real estate analysts will help determine whether the property will perform better as a short-term or long-term rental. The key factors are based on market conditions, demand, season, and location.
We then convert the investment from a luxury renovation or development to a luxury rental investment and offer the original investors the option to exit the investment or to continue into the ongoing rental. If any of the original investors decide to exit, we will offer their shares to new investors on a first-come, first-served basis.
Our experienced team handles every aspect of the process from start to finish. We negotiate financing options, secure the loan, oversee the property management company, handle the accounting services, quarterly investor distributions, and Schedule K-1 filings.
Two ways to get into a luxury rental investment
- 1: You invest early during the renovation or development phase of the investment. After the renovation/development phase is complete, you’ll have the option to continue your shares into a five-year rental investment.
- 2: You invest during the rental phase. This is only possible if investors in the luxury renovation/development phase decide to sell their shares after the construction is complete. If shares are available, they will be offered to investors on a first-come, first-served basis. Please note that if all investors from the renovation/development phase decide to continue their investment into the rental phase, direct rental investments will not be available.
The option to exit or continue for another five years
Luxury home rentals are a five-year investment. Three months before the end of a five-year period, we will get a new appraisal and may refinance the property based on the interest rate and appreciation growth. When the appraisal is complete, we will contact investors to give you the option to sell your shares or to continue into another 5-year investment. Depending on the new financing, Gatsby may pull money out of the deal and disburse funds back to the investors that continue the investment. The process is then repeated the same way every five years.