By Chris Mamula of Can I Retire Yet?
Over the past few years, I’ve flirted with the idea of investing in real estate. But the combination of my aversion to debt and the idea that real estate is too much work has kept me from taking the plunge.
A reader of the blog recently summed up my thinking in one sentence. She wrote, “I would love to participate in the real estate market, but don’t really want to become a landlord and publicly traded REITs are not ideal either since they are still stocks hence not enough of a diversifier in my opinion.”
So I reached out to my blogging friend and real estate investor Brian Davis and posed this dilemma to him. He summarized real estate investment options, from least to most effort, for those of us sitting on the fence considering whether or how to add real estate to our portfolios.
Take it away Brian….
(Disclosure: Can I Retire Yet? has no financial relationship with Brian or his company SparkRental.)
The Pros and Cons of Real Estate
Real estate comes with some impressive advantages for anyone looking to retire. From ongoing income to tax benefits, leverage, to inflation protection, investors can put their real estate investments to maximum use.
Real estate comes with its share of disadvantages too. Poor liquidity, diversification challenges, and high barriers to entry all come to mind.
But the amount of effort required ranks up there with the greatest deterrents holding would-be real estate investors back.
Still, not all real estate investments come with the same headaches or labor requirements. Below are the most common real estate investments, ranked from least to most labor-intensive…. Read more