Investing in real estate can be a great way to both grow and create long-term wealth. It is one of the most reliable investments you can make, which can be an excellent idea for anyone looking to expand their investment portfolio. Purchasing properties and renting them out can create a recurring cycle that never stops, leading to a steady stream of incoming cash from tenants. Let’s dive into the pros and cons of real estate vs. stocks.
How Does Investing in Real Estate Work?
Real estate investing is purchasing real estate for the primary purpose of renting it out. There are several ways to invest in real estate, but they share a common goal of earning a return on your investment through rental income. Whether you enter into multifamily investing in mid-size apartment buildings, buy a property and rent it out by yourself, or hire a real estate management company to handle the property, they each have advantages and disadvantages.
Investors can choose to buy real estate in any number of locations, but renting out properties in developed urban areas is generally more profitable than investing in undeveloped land. Additionally, investors can choose to diversify their portfolios by investing in various kinds of properties.
How to Choose a Real Estate Investment: The Basics
Choosing a real estate investment boils down to knowing just how involved you want to be. There is homework involved to get off on the right foot. For an investor who is new to the game or who wants an offhand approach, starting out with a real estate investment firm like Instant Equity Investing can be a great option. In this scenario, you don’t have to worry about finding or managing properties.
With Instant Equity Investing, we keep you updated as we go, and you will enjoy cash flow distributions and regular reporting. You merely sign up as an investor and let our company handle everything on your behalf.
Investors can also choose the direct real estate investment route, which requires them to seek out the deals themselves, which can be a bit daunting for a first-time real estate investor.
Investing in Real Estate: The Pros
Real estate is a valuable asset that can produce a steady stream of cash. It provides a great source of passive income and potential for long-term growth and diversification, making it one of the most reliable investment options. While the income benefits are good, they aren’t the only pros. For instance, real estate investing can also offer:
- Long-Term Security
- Tax Advantages
- Ability To Leverage Funds
- Protection Against Inflation
Because they are long-term investments, they allow time to analyze your options. More time means more informed decisions. Who can tell us they don’t appreciate that?
Investing in Real Estate: The Cons
As with every investment, there are some downsides to investing in real estate. Like any investment, if you choose the wrong property or fail to do your homework, you can incur a loss. Additionally, buying and selling can prove to be stressful for investors. Another con is that it is not a liquid investment meaning that you can’t just immediately convert your investment to cash. Selling real estate generally takes some time. As a result of these potential cons, many investors look to real estate investment firms for guidance and execution.
Real estate investing can be a great way to generate long-term wealth and achieve financial freedom. It is one of the most predictable investment options available. Historically it has been shown to produce a steady stream of cash that withstands the ups and downs of traditional stocks. Isn’t it time that your story included financial freedom? Contact us today – We can help you get there!
Click here for our complete Guide to Passive, Hands-Free Real Estate Investing.