Pros of Investment Real Estate:
- Investment real estate can provide reliable income during retirement
- Rent typically goes up during periods of high inflation so investment real estate makes a good hedge against inflation.
- Investment real estate provides many favorable tax deductions.
- Owning investment real estate further diversifies our investments when owned along with mutual funds in our retirement accounts.
- We can use other people’s money (bank loans) to purchase the majority of an asset that we own and control.
- We have control over the asset. We can improve and alter it as we see fit to improve rents and equity.
Cons of Investment Real Estate:
- Rental management isn’t for everybody. It requires work to maintain the property and deal with tenants.
- Risk of lawsuit.
- Variability of income during periods of vacancy.
- Investment real estate is a hard asset that cannot be liquidated quickly.