Pros And Cons To Real Estate Investing

Pros And Cons To Real Estate Investing


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Are you looking for things to invest in? Then we’re sure you have done the research and have found that Real Estate is one of such avenues. But the question arises, is it worth it? Or is it something that looks good but isn’t? These are the questions we’re going to answer today. Indeed many people will tell you that they invested in real estate, that they bought property only for them to sell it at a higher rate. But is it true? Or are they blowing the whole thing out of proportion? Here are the pros and cons of investing in real estate:

PROS:

  • Direct Control: With Real Estate investment you have direct control over your investment, you can do whatever you want with it whenever you want. Want to change something, want to upgrade, want to buy something, sell it, etc. You can do all that and more because you have full control over your Real Estate investment.
  • Monthly Income: If you have tenants living on your property then you can get a monthly income in the form of rent from them. This is a good way to get regular returns on your investment.
  • Asset: Think of it as an asset, it has potential to get big with time. The investment will mature over time and then will be many times the value it is now.
  • Tax Benefits: Real Estate Investors enjoy unique tax benefits and returns unique to them. These benefits are only accessible if you are a real estate investor. Things such as depreciation, rental income, capital gains, etc are some of the benefits available to real estate investors.
  • Insured Investment: Real Estate is insured typically. Meaning that if disaster struck, you’ll have a backup plan and a contingency plan to recover your losses.

CONS:

  • Market Trends can be fickle: Markets are unpredictable, some invest in Real Estate expecting a great return but the market changes and they end up in a loss instead. There is no guarantee where the market will go, you may end up with more than you invested or you could end up with nothing at all.
  • Landlords: Most real estate investors have to be landlords as well as normal investors. It’s not a requirement but it’s something that most investors have to do because of the condition they end up in.
  • Financing: Securing financing for pure investors can be a little hard. It’s not impossible but they are known to encounter problems along the way.
  • Cash Flow Break: As we talked about tenants allow a good cash flow, vacancies can break it. When there is no one living at the property, there is no one to generate the cash flow in the form of rent. This can be an issue if that money is a big part of your income.

Need to know a lot of info: 

You need to know lots of information up front such as mortgages, insurance policies, you need to know how to find the right investment property, etc.

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