Here’s 5 Advantages:
- High rate of return, typically better than stocks or bonds;
- Tax shelter (depreciation, 1031 exchanges, and capital gains exemptions);
- Hedge against inflation;
- The power of leverage: making money with OPM;
Here’s 5 Disadvantages:
- Illiquid (not a quick cash option);
- Local market risk (casualty from storms, changes in jobs or government regulations);
- Requires expert knowledge (contractors, engineers, attorneys, banks, realtors, title insurance);
- Asset management expenses, and
- Risks (on-site, local market, regional, national, and international.
The tv shows make real estate investing look easy and glamorous, the reality of it is – it is not easy or glamorous.
Yes, you can make good money if you do it under the right conditions and you should own real estate, especially if you are currently renting.
You’re better off building equity and taking advantage of deducting the tax interest payments from your taxable income, than paying someone else’s mortgage off (rent).
In conclusion, with a decent plan of action, using OPM, you could fund your retirement lifestyle far better than relying on interest from your own savings and depending on social security.
Go, buy some real estate!