Pros and Cons of Real Estate Investments

Several years ago, I took a deep dive into real estate investing and I was immediately captivated by this investment strategy. The first thing I liked about it was that banks are willing to loan 80% of the value of the property and then the tenant pays 100% of the payment. Now of course, there are circumstances that can change this equation, but nonetheless, I really liked this concept. 

Here are three additional reasons that I like real estate:

1. Investment properties provide potential income streams through rental payments, allowing for passive income.

2. Properties tend to appreciate in value over time and simultaneously someone else is paying down the mortgage. 

3. Real estate investments offer tax advantages such as deductions for mortgage interest, property taxes, and depreciation.

However, of course there is a flip side to this. Here are three potential pitfalls:

1. Property investments may involve ongoing costs like maintenance, repairs, and property management fees. 

2. Market fluctuations can impact property values, leading to uncertain returns. 

3. Initial investment and financing requirements may pose challenges for some individuals. 

What are your thoughts?

-GC