Real estate tends to appreciate in value over time, can act as a hedge against stock market volatility, offers great tax advantages and also can provide a stable monthly income.
1. Short-Term Rentals
Pros:Owners can charge higher rates per day than long-term investment properties and they can also potentially use the home themselves when renters do not occupy the property.
Cons:Vacation properties can also represent one of the more expensive types of real estate investments. They can potentially carry intensive maintenance costs as a result of excessive wear and tear.
Pros:Becoming a landlord and owning a long-term rental property (or several) is one of the most common ways to invest in physical real estate. Some people pay cash for their rental properties, while others use leverage to take on more risk with financing and property management.
Cons:You will have to depend on your tenants being reliable and making their rent payments on time. If they don’t, you might have to pursue legal action or evict them for non-payment.
Pros:Flipping houses is a great way to get started in real estate investing if you have cash on hand. Fixer-uppers provide investors with the ability to purchase properties in neighborhoods that might otherwise be out of their price range because the home is in need of repair.
Cons:Flipping a fixer-upper is a big responsibility and will require a lot of time, money and effort. The process is very intensive, and you will be involved in everything from choosing paint colors to making major repairs.