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 |
| 
