Investing in real estate for retirement, early or not, can be a sound strategy, but there are pros and cons.

And article by the HowtoFIRE.com runs the traps of using real estate investments to fund your future, and it’s a great place to start gathering information.  

Among the pros from the Financial Independence Retire Early-focused article:

When you buy real estate, you can finance 80-97% of the purchase with other people’s money. In other words, you can build your own portfolio of income-producing assets mostly financed by someone else.

And among the cons?

You can buy or sell stocks instantaneously. But real estate is notoriously illiquid. Selling a property typically takes months.

So if you might need your money quickly, buying rental properties might not be the right move.

But from supercharged returns to an investment that automatically adjusts for inflation, real estate can be a solid bet, with lots of ways to get in the game.

While buying a property, even one that’s financed, is a bigger initial investment than buying a share of stock or investing in an index fund or buying into a Real Estate Investment Trust (REIT), it could provide much bigger returns.

There is lots to consider, from how handy you are to unexpected costs to location, location, location.

But it’s worth checking out.

In brief

Stocks by the drip: At the close of trading Thursday, a single share of Apple cost $248.76. For lots of investors, it would take a while to save enough for even one share.

But what if you could buy a fraction of a share? Turns out you can.

Fractional investing, in fact, could boost your portfolio.

From the article:

Even though you might think it’s not a big deal to buy a quarter of a share, the reality is that any investment allows you to earn compounding returns. The longer you’re invested, the bigger your gains down the road.

Whether through a Dividend Reinvestment Plan (DRIP) or through an online broker that allows the purchase of fractional shares, buying part of a share could get you started sooner.

Of course, before you invest make sure you can tolerate the risk of buying individual stocks rather than index funds.

Tips of the week

‘Tis the season: Now that the calendar has turned to November, it’s time to think about … taxes. Kiplingers offers 10 tips for lowering your 2019 tax burden with moves you can make now.

OK, that was mean: We didn’t mean to bait and switch you so abruptly from the holidays to taxes. Well, we sorta did. Let us make it up to you. Here are tips from Fiscal Femme for saving for holiday gifts, or anything else.

Subscribe to the EveryIncome Newsletter

Get free personal finance articles + first look at our new site

Share this