Real Estate InvestingReal estate is attractive, and it has been for several years now.  With interests rates still near historical lows, and home values starting to rise in many areas of the country, now is a great time to consider real estate as an investment option.

 

The Pros of Real Estate

Investors look to real estate as an attractive investment for several key reasons.  First is value.  If you can buy a distressed property and fix it up, you can unlock immense value.  Second is cash flow.  If you rent out your property, you can realize great cash flow that is inflation protected and should rise over time.

There are other reasons to hold real estate as well, but they are more complex.

 

The Cons of Real Estate

The biggest thing holding investors back from real estate is price.  The bottom line is that even the cheapest house or condo is still very expensive relative to other investments.  Plus, real estate costs money to maintain.

Beyond the purchase price, a would be landlord will face expenses such as taxes, insurance, utilities, management fees, and more.  You can look for discounts for some of these things, such as insurance discounts through a company like CIA Landlords, but you’re still going to have to deal with the costs.

 

Other Alternatives

You don’t have to put a lot of money into a single property to get started investing in real estate.  You can invest in real estate by joining a syndicated project, in which you go in on buying a property with other investors, or you could buy a real estate investment trust.  These options are better for individuals that don’t have a large portfolio but want to get some real estate exposure.

Now that you know the basics of getting started, are you interested in joining the cult of real estate investors?

About Robert Farrington

Robert Farrington has written 77 articles on this site..

Robert Farrington is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances.

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2 Responses to Joining the Cult of Real Estate Investors

  1. We made the real estate plunge 3 years ago. Instead of selling our previous home, we kept it and rented it out. A year later we purchased a second rental. Having more than one rental can be work, but by having two cash flowing properties you are more protected from vacancy risk (paying the expenses out of pocket without having a rent paying tenant). I’m definitely hooked. Rental income will play a big part of our retirement income stream

  2. As someone who’s already a card-carrying member of the real estate cult, I’ll add one more con: the learning curve. Even little mistakes can be costly in real estate. On the other hand, this also means that you can get better at it and make more profit over time.

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