Real estate investment trusts (REITs) can be likened to buying stocks in a company. REITs offer a way to invest in real estate without having to own, operate, or finance properties. From commercial property investment, residential, student housing, to the advanced level of purchasing multifamily properties and renting them out to expand income, or sell them when the property estimation goes up.
Investing in real estate has its pros and not-so cons, which means the cons, in some ways, when weighed side by side with the pros, might not be so much cause for worry. So in contrast with customary venture means like the stock exchange, real estate is a considerably less volatile industry notwithstanding the risks and expenses. All the same, we would list a few.
Pros: Nonstop in-flow of cash
Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made. When you buy an investment property and choose to rent it out, you will, for the longest term, continue to get rental pay from your tenants. There will always be people looking to rent a new space or lease, or even buy. And the best part it, land appreciates. So you would always get value for your money.
Pros: In a for a good time for a long time
Real estate values tend to increase over time, and with a good investment, you can turn a profit when it’s time to sell. Rents also tend to rise over time, which can lead to higher cash flow and as you build equity, you have the leverage to buy more properties and increase cash flow and wealth even more. Additionally, real estate is a tangible asset and one that can serve as collateral.
Not-so cons: Time and patience
Real estate investment also requires portfolio expansion. You can’t be static. It’s imperative to have a more extended term investment strategy. Purchasing and selling properties is a long process, however if you are patient, it merits the pause and you will ultimately bring in cash.
Not-so cons: Huge capital
It requires huge capital. Sadly, yes, but highly rewarding. Be it investing, flipping houses, the quick buying, remodeling, and selling of residential properties, building from scratch, residential real estate, or even commercial real estate, although they have varying startup capital, you must have something tangible to kick off.