- Why is it important to own real estate?

- What is a R.E.I.T.?

- What is a Tax-Assisted Real Estate Investment Offering?

- Why join a private R.E.I.T.?

WHY IS IT IMPORTANT TO OWN REAL ESTATE?

Historically, real estate has proven to be the greatest wealth-builder for individual investors. Although we have seen the rise of securitization and “paper” investments, real-estate is more than just a way to diversify one’s portfolio. Real estate investing can prove a profitable option for those who are actively engaged in an asset allocation program. Carefully selected income properties have real long-term value secured by tangible brick and mortar assets and are fortunately not subject to the wide fluctuations and volatility of stock markets. Even when the markets are flat, real estate can still produce high returns.

How to Increase Your Earnings and Build Wealth With Real Estate:

1. Income Flow
2. Accumulation of assets
3. Preservation of capital
4. Stability
5. Protection against inflation
6. Leverage
7. Tax advantages

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WHAT IS A R.E.I.T.?

A Real Estate Investment Trust, R.E.I.T. for short, originated in the United States in the 1960’s as a security that allowed a group of individuals to invest in real estate. They were introduced to Canadians in the early 1990’s to allow unit holders to invest in professionally-managed real estate properties, much the same way Americans were privy to. For investors who preferred real estate to other investments and did not have the substantial amount of capital required to regularly invest in brick and mortar, R.E.I.T.’s provided a vehicle by which they could invest in such assets.

R.E.I.T.’s were designed to be a “flow-through entity” (F.T.E.) investment. Essentially, this means a R.E.I.T. is a trust or corporation that serves as a conduit for the real estate investments of its shareholders. They are responsible for distributing the majority of income cash flows to investors. As a unit holder in the R.E.I.T., a proportional share of the profits is distributed to you. R.E.I.T.’s offer investors future reliable income, growth, security, and tax-saving benefits.

Tax Advantages for the Investor

It is extremely difficult for most individuals to accumulate any real savings from their work salary alone due to the progressive tax system in Canada. The more money you make, the more taxes you pay. People work very hard to save, and when they do save some monies, any interest earned will be taxed as ordinary income. Certain types of investments and investment techniques allow an investor to take advantage of opportunities to avoid undue taxes. The less tax you pay, the higher your return will be on any given investment. A real estate investor is able to take advantage of a number of tax planning techniques and strategies.

The Canada Revenue Agency termed R.E.I.T.’s “flow-through entities” (F.T.E.’s) for this particular reason: individual unit holders are permitted “flow-through” income remuneration and tax deductions that are usually only available to individuals who directly own the real estate asset. Real estate investments offer steady appreciation and deliver a strong, inflation-adjusted annual income. In addition, leverage and tax advantages are powerful investment tools.

S.T.A.R.T. provides a method of reducing taxable income. This results in a reduction of the payments made to tax collecting entities, including federal and provincial governments. Governments allow individuals to invest in their own pension in order to reduce the burden of the government funded pension system. S.T.A.R.T. provides tax savings that simply allow otherwise paid money for taxes to subsidize your retirement investment plan.

Effective Tax Planning

Tax evasion is an effort or practice to not pay taxes by illegal means. A few individuals may attempt to stretch the limits of legal interpretation of the Canadian income tax laws. Effective Tax Planning is certainly not illegal, and it is possible to reduce your tax liability within the framework of the Canadian tax laws.

Real estate makes good tax sense. S.T.A.R.T. makes even more sense. To begin with, your financial services are tax deductible. The cost of these financial services is included in the purchase price of units and is therefore treated as an expense for tax purposes. Also, interest paid on purchase loans is also deductible. Real estate continues to be one of the most Effective Tax Panning vehicles available and proven long-term investments.

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WHAT IS A TAX-ASSISTED REAL ESTATE INVESTMENT OFFERING?

A Real Estate investment trust is an equity formed in order to offer the
opportunity to smaller investors to channel private savings into real
estate investment ventures that would otherwise be beyond their financial
and managerial capabilities. Many firms are in the business of acquiring,
managing and selling real estate projects. They do not usually invest much
of their own capital. Rather, they act more as agents, bringing together
other investors with capital that forms the equity base for acquiring the
property and benefit from the fees they receive for their services and
interest retained from the property.

Winchester Financial Group does not pool investor’s capital together.
Rather, Winchester finds properties for sale that have an unusual profit
potential and acquire the property. We then use the expertise of our real
estate professionals to develop, manage and operate the asset. Winchester
then provides this real estate venture to investors, as an operational
profit-maximizing property. Winchester acts as an agent on behalf of the
group of investors to continually manage, re-develop and operate the
property. The investors then reap the benefits of owning undivided
interests in the asset, providing them with tax benefits in the early
years and future cash flow income.

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WHY JOIN A PRIVATE R.E.I.T.?

Private R.E.I.T.’s offer:

• Undivided ownership interest in brick and mortar assets
• Low risk
• Protection against inflation
• No subjection to market volatility
• Preferential tax treatment
• Relief of property management hassles
• Potential for capital appreciation
• Passive income for life
• Low correlation to both equity and fixed income securities, providing further diversification of an existing portfolio.
• Further diversification of an existing investment in local real estate

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