Investing in real estate is great for accumulating ongoing passive income, providing inflation protection and diversifying your portfolio.
But real estate also offers better protection against recessions than most assets.
But there are many ways to invest in real estate. If you’re thinking about either buying rental properties or investing in real estate crowdfunding, how do you choose between them?
Let’s look at the options and some things to consider for each one.
The case for rental properties
Buying properties directly comes with plenty of advantages. As you explore rental investing, keep the following perks in mind.
Potential for high returns
Experienced real estate investors consistently earn high returns on their investments. Returns that beat out stocks, bonds, and other investments.
I recently earned a 47 percent return on a house flip, and it only tied up my money for six months. That’s nearly a 100 percent annualized return. If I had kept the property as a rental, I would have earned about a 15 percent annual yield on the net cash flow — and then earned an even bigger paycheck years from now when I sold it.
Granted, it takes skill to earn high returns on real estate. And that skill takes time, effort and often money to develop. But once you know how to invest in real estate effectively, you can easily earn higher returns than the average investor can earn through traditional investments.
And when you finance your real estate deals, you can earn even…
