Investing has grown beyond traditional assets. While stocks, mutual funds, and bonds are still standard portfolio inclusions, many other avenues exist that can be rewarding in the long run- if you’re willing to put in the time.
One such avenue is real estate investing, which can be an excellent way to build money for your retirement. It takes dedication, research, and planning, but it pays off if you’re committed to it. If you’re interested in investing in real estate, here are some tips you should know before getting started:
Know the costs
Properties cost quite a bit to purchase outright, but if you have the funds or are willing to take out a loan, it can be worth it. It’s not as simple as purchasing a property, though- additional costs such as maintenance, yearly upkeep, utilities, and taxes all drive up the real cost.
Select the property type
You can purchase rentals, which could be commercial or residential. You can become a landlord and rent out an apartment or home. You can use your property as a vacation rental or Airbnb. Before selecting a property, decide what your plans are for it and what goals you have in mind.
Review the area
Location is a key factor. Check the market value, the neighborhood, and what the location offers. The type of rental you’re interested in can help you determine where to look. For residential or vacation rentals, consider the community, proximity to popular attractions, and way-of-life factors.
Protect yourself
If you’re thinking about investing in one or multiple properties, consider using an LLC to purchase them. It anything should happen on those properties, you won’t be held personally responsible, and it can give you “checkbook control,” which can help if time is a factor when accessing your retirement funds for real estate-related purchases.
Source: Forbes