Real 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.
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?