10 Pros and Cons of Real Estate Methods
There are several types of real estate, each with their own unique way of investing in them. It’s up to you to determine what your needs are before you can decide which one is best for you. Below you will find their advantages and disadvantages.
1. Rental Properties – Advantage: long term return. Disadvantage: being a landlord
2. Rent-to-own homes – Advantage: buyer responsible for maintenance. Disadvantage: tricky bookkeeping.
3. Low income rentals – Advantage: higher cash flow Disadvantage: more repairs and tenant problems
4. Fixer-uppers – Advantage: fast return on investment. Disadvantage: higher risk
5. Buy for cash, sell for terms – Advantage: sell for high price and hight rate Disadvantage: your capital is tied up for awhile
6. Buy land, split it and sell it – Advantage: simple real estate investment Disadvantage: takes a long time and no cash flow
7. Boarding homes – Advantage: a lot more cash flow room by room Disadvantage: a lot more headaches
8. Commercial – Advantage: little management and higher return Disadvantage: tough market to get into
9. Buy, live in it, and sell it – Advantage: New tax law allows for big tax-free profit after 2 years (or less)…start all over again Disadvantage: you must move often
10. Speculation – Advantage: buy in the path of growth and raise profits especially if you buy low at first Disadvantage: prices aren’t predictable.