Moving some money from your S&P index fund over to a REIT is as easy as a click of a button. But flipping houses is more like building a business than investing in stocks.
What are the pros and cons of real estate investing? There’s no one-size-fits-all answer for everyone. But here are the main benefits I’ve found of investing in real estate.
The relatively stable cash flow generated from real estate provides a great annuity to fund your living expenses, while in the background the tenant is paying off your mortgage and the home is appreciating and adding to your net worth.
By developing the skill of finding good deals, learning how to restore unloved houses to their former glory, and how to create “sweat equity”, you are in control of how much money you earn in real estate.
In some respects, investing in real estate takes the mindset of an entrepreneur – a can-do attitude, willingness to step out into the unknown, and ability to make decisions with incomplete information.