Buying an investment property

A second way to invest in real estate is to buy residential
housing such as single family homes or multi-unit buildings,
and rent them. In many ways, buying real estate in this way
isn’t an investment, it’s a business. Maintaining a property
can easily turn into a part-time job. If you’re a person who
dreams of putting heart and soul into a property, however, it
may be worth investigating. If you do decide to take this
route, first, be sure that you have sufficient time to devote to
the project. Second, be careful not to sacrifice contributions
to tax-deductible retirement accounts such as 401(k)s or IRAs
in order to own investment real estate.
0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000 Own
Rent
30252015105 1
$538,415.40
$373,348.52

Deciding to become a real estate investor depends mostly on
you and your situation. Is real estate something that you have
an affinity for? Do you know a lot about houses, or have a
knack for spotting up-and-coming areas? Are you cut out to
handle the responsibilities that come with being a landlord?

Do you have the time to manage your property?
Another drawback to real estate investment is that you earn
no tax benefits while you’re accumulating your down payment.
Retirement accounts such as 401(k)s and IRAs may give you
an immediate tax deduction as you
contribute money to them. If you haven’t exhausted your
contributions to these accounts, consider doing so before taking
a look at investment real estate.