Benefits and Risks of Real Estate Investing

Investing in real estate can be a great idea. But just like anything, you want to know what you’re getting into before diving head first. Here are some pros and cons of real estate investing. 

Benefits of Real Estate Investing

• Steady Income. If you rent out a property, whether a basement apartment or a vacation home, it can provide a steady source of rental income. A steady rent check can provide an extra layer of passive income and financial security. 
• Appreciation. In most cases, your real estate investment will appreciate over time. That could mean charging higher rent over time, and if you decide to sell your property, you’ll likely rake in quite a profit.
• Tax Advantages. You can qualify for a few tax benefits if you own a property. You can get deductions on the mortgage interest, property taxes, maintenance costs, and more. 

Risks With Real Estate Investing

• High Upfront Expense. It’s not cheap to buy a property. It will likely cost you plenty upfront just to acquire the investment.
• Property Maintenance. It’s not cheap to maintain a house or apartment. You’ll have to handle landscaping, repairs, upkeep, and more. A property manager can help with the maintenance, but those costs can eat into your profits.
• Occupancy. Your investment property won’t make money if no one lives in it. You need to constantly make sure that you have a renter to earn some profit.

Do One Thing: Carefully think through all the financial implications, benefits, and risks before investing in real estate.