Which Type Of Real Estate Investment Is Right For You? 5 To Know

Investing in real estate could be a smart financial decision with proper planning and budgeting. Real estate tends to appreciate in value over time, can act as a hedge against stock market volatility, offers great tax advantages and can provide a stable monthly income.

All things considered, buying property represents one of the most effective ways to build wealth but also one of the slowest. Though, once your investments start to compound, your portfolio will begin to have several income generating assets. You can reinvest the profits you make from selling previous investments and see your wealth truly begin to snowball.

To learn more about the different types of real-estate investments available to you as well as how to determine the right one for you, continue reading this comprehensive guide.


1. Short-term rentals

Pros

Short-term rental properties, otherwise known as vacation rentals, can act as one of the best ways to generate significant income from your real estate holdings. Owners can charge higher rates a day than long-term investment properties and they can also potentially use the home themselves when renters do not occupy the property.

Moreover, home-sharing apps such as Airbnb and Vrbo have made vacation rentals much more accessible and easier to market than ever before.


Cons

Vacation properties can also represent one of the more expensive types of real-estate investments. They can potentially carry intensive maintenance costs as a result of excessive wear and tear. Further, you will have to clean it after each stay, which could range from every couple of weeks to every day, depending on your guest preferences.

If you do not want to get your hands dirty, you can hire a property manager, but you still need to manage your property manager to ensure the rental remains in good condition. On short-term rentals, property managers typically charge around 25% of rent as compensation, more than long-term rental property managers, discussed next.

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Riley Adams is a CPA and the author of the Young and the Invested website, which focuses on financial independence and ...

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Bindi Dhaduk 1 month ago Member's comment

Thanks, have any more articles of advice?

Riley Adams 1 month ago Author's comment

Hey Bindi, I'll be sure to continue publishing more content at TalkMarkets. If you'd like to see more of my content on my own site, please visit https://youngandtheinvested.com/. Thanks!

StockHound 1 month ago Member's comment

You'd probably enjoy reading some of Than Merrill's work on this topic. He's been a real estate contributor here for a while and is pretty well known.

Susan Miller 1 month ago Member's comment

Thanks for sharing. I see you are new here. Welcome to TalkMarkets!

Riley Adams 1 month ago Author's comment

Thanks, Susan! I'm looking forward to making contributions to the site. I hope you'll continue reading!

Andrew Armstrong 1 month ago Member's comment

Thanks for the share Riley, but do you have anything for more advance investors? Or is everything you write geared to beginners?

Angry Old Lady 1 month ago Member's comment
Riley Adams 1 month ago Author's comment

Hey Andrew, most of my content aims the beginner investor demographic. That said, I do document my love affair with index fund investments here: youngandtheinvested.com/when-investing-in-index-funds/.

I will soon publish an article about leveraged index fund ETFs on my site and here as well. It pushes against the notion that buying and holding leveraged index funds is a bad idea.

Andrew Armstrong 1 month ago Member's comment

Great, looking forward to that article. I followed you so I can get notified once it's published here.

Alpha Stockman 1 month ago Member's comment

Some good solid, tips here.

Adam Reynolds 1 month ago Member's comment

Interesting, thanks.