| There are different types of real estate, and | | | | high price AND high interest. Disadvantages: You |
| different ways to invest in them. Which way is | | | | tie up your capital for a long time. |
| best is for you to decide, according to your | | | | 6. Buy land, split it and sell it. Advantages: It is |
| particular needs. Here are a few ways to | | | | simpler than most real estate investments, with |
| consider, with their advantages and disadvantages. | | | | the possibility of great profits. Disadvantages: It |
| 1. Rental houses. Advantages: One of the easier | | | | can take a long time, and you have expenses, but |
| ways to get started, and good long term return | | | | no cash flow while you wait. |
| on investment. Disadvantages: Being a landlord isn't | | | | 7. Boarding houses. Advantages: You can get a lot |
| much fun, and you typically wait a long time for | | | | more cash flow renting a house by the room, |
| the big pay-off. | | | | especially in a college town. Disadvantages: You |
| 2. Rent-to-own houses. Advantages: When you | | | | can get a lot more headaches renting a house by |
| buy, then sell on a rent-to-own arrangement, you | | | | the room, especially in a college town. |
| get higher rent, and the buyer is usually | | | | 8. Commercial real estate. Advantages: Long term |
| responsible for maintenance. Disadvantages: The | | | | triple-net leases mean little management and high |
| bookkeeping is tricky, and most tenants don't | | | | returns. Disadvantages: Tough market to break |
| complete the purchase (this can be an advantage | | | | into, and you can lose income on vacant |
| too, but it does mean more work for you). | | | | storefronts for a year at a time. |
| 3. Low income rentals. Advantages: The same as | | | | 9. Buy, live in it, and sell. Advantages: The new |
| with any rentals, but with higher cash flow. | | | | tax law means you can fix it up, and sell for a big |
| Disadvantages: The same as with other rentals, | | | | tax-free profit after two years, then start the |
| but with more repairs and tenant problems. | | | | process again. Disadvantages: You have to move |
| 4. Fixer-uppers. Advantages: A quick return on | | | | a lot. |
| your investment, and it can be more creative | | | | 10. Speculation. Advantages: Buying in the path of |
| work. Disadvantages: Higher risk (many | | | | growth and holding until values rise can yield large |
| unpredictables) and you get taxed heavily on the | | | | profits, especially if you buy low to start. |
| gain. | | | | Disadvantages: Prices aren't that predictable, you |
| 5. Buy for cash, sell for terms. Advantages: You | | | | have expenses with no income while you're |
| get a high rate of return by paying cash to get a | | | | waiting, and transaction costs can eat much of |
| good price, and selling on easy terms to get a | | | | the profits. |