Investing Tax Free
 

Pros and Cons of Real Estate Investments

The following tables show pros and cons of the three different types of real estate investments. When investing in real estate, you need to know the pros and cons of each real estate investment before you start investing. Real estate investing is time consuming and you are dealing with physical properties which can be more of a headache than investing in stocks, mutual funds, municipal bonds or other investments.

The pros and cons of each type of real estate investment
Real Estate Investment Type 1, Owning & Upgrading
 
Pros
Cons
Maximum control over real estate investment performance. Optimizing real estate investment can be costly and time-consuming.
Home is real estate investment; less money down! If your turnaround time is more than a year, than this is the least profitable of all 3 types.
Great control over when to buy, sit on, and sell. Stocks and stock funds annually out-perform this real estate investment.
Foreclosed properties make 2nd home investing even more profitable. Living in a dump for a long period of time if it's your 1st investment home.
 
Real Estate Investment Type 2, Lording the land.
 
Pros
Cons
You control the rent. Being a landlord is a full-time job
Monthly income delivered to your door Additional Health department codes, taxes, and community laws
Only need to keep about 80% of units occupied to be profitable (Multi-unit) Grounds keeping, utilities, storage, parking, upkeep, etc… All constant headaches
 
Real Estate Investment Type 3, The Limited Partnership.
 
Pros
Cons
Time enough for your own career! Prohibitive buy-in price
No tenant Headaches Not as hands-on as other types