Real Estate Investments has always been a personal hobby of mine. Here is one real estate investment that you can make today but buyer be warned it is not for the faint hearted!!!
Physical Real Estate
When most people hear the phrase “Investing in Real Estate” they think of physical real estate. Physical real estate is defined as a piece of land with a building on it and can be split into residential (multifamily and single family units) or commercial units.
Investing in physical real estate has advantages and disadvantages. Here are some advantages and disadvantage of investing in physical real estate
Advantages: Cash-flow and Appreciation
Generating cashflow is one of the biggest advantages of buying physical real estate. By buying property and getting a tenant to pay your expenses (aka mortgage, strata fees, property tax etc) you are able to generate cashflow aka passive income
Appreciation is the 2nd advantage of buying physical real estate. When you buy property it will appreciate in value (unless you are in Detroit ). In the right market conditions a 30,000 dollars down payment can easily becoming a 300K profit by buying and holding a property for X number of years and using the tenant’s rent to pay off the mortgage
Disadvantages: TENANTS, TENANTS and TENANTS
Investing in physical real estate is a semi-passive investment at minimum and a PITA (pain in the ass) most of the time. As the landlord you will be dealing with late payments, broken toilets, property damage and if you are not scared enough maybe you will encounter the TENANT FROM HELL. You know the one tenant who calls you at 2 am in the morning to tell you that their sink is overflowing… yea that tenant. Of course it all comes down to how you communicate and manage the issue.
Conclusion/Summary/I am too lazy to write anything else
Physical Real Estate can generate Cashflow and Appreciation over time but Landlording sucks big time antelope balls. If you want these advantage without having to be the landlord then take a look at Mortgage Investment Corporations and Real Estate Crowdfunding instead. I will talk about these two forms of Real Estate Investment next time so be ready!!!!
Signing off until next year