INVESTING IN REAL ESTATE
Should You Invest In Real Estate?
Real Estate is an appreciable asset that can provide you with passive income, strategic tax breaks, and diversification of your financial portfolio. It can offer a more stable and balanced approach to expanding your portfolio than less reliable assets such as cryptocurrencies, commodities, or stocks. In periods where the economy is in decline, your properties can still appreciate even if your other investments are suffering. Ideally, your strategy and goal would want to invest your capital into properties that you can reasonably expect to grow in value over time, with minimal risk.
Real Estate Investment Options
- Consider investing in rental properties. While this approach can require a significant amount of capital or financing due to potential maintenance or renovation expenses as well as inevitable months where the rental property may be vacant, it does provide a consistent income, the potential for the properties to appreciate, and various tax-deductible expenses. You can start small, with a single-family residence and gradually expand the enterprise as you learn how to manage tenants, repairs, and upkeep.
- An even easier way to start investing that doesn’t require such a large amount of capital at the outset, are REITs. These are real estate investment trusts that own a variety of different real estate properties that can be anything from office buildings, medical suites, retail properties like malls, or apartments. You can invest in these real estate trusts just like you would if you were investing in stocks. Investing in Reits is popular because they usually result in the payment of high dividends and can supply a regular income or be used to reinvest for further growth.
- A more risky venture that can pay off in faster profits, is house flipping. In a nutshell, the goal is to purchase a home that is in need of repairs or renovation and is selling at a low price, remodel the property while spending as little as possible, and then sell it for more than the cost of purchase and renovations. This strategy can really pay off, but it does require some expertise in real estate evaluation and experience in estimating the costs involved in remodeling.