Owning some income-producing real estate, in addition to having a solid portfolio of other investments, can be a very good thing to becoming financially free and enjoy a better lifestyle. 

When you invest in real estate always think long-term.  For those who don't want to take on the role of a landlord, other real estate investments exist. 

Single and Multi-family Properties 

Beginners may want to start investing in single home or 2 to 4 multi-family properties.  Single-family homes make good first properties because they don't entail the same hassles and headaches associated with multi-unit apartment buildings. They are also more affordable.  The problem with single-family homes is that if you lose a renter you lose 100% income.  If you own a property with 10 apartments and you have 2 vacancies you still get 80% of your potential income. 

Not everyone wants to be a landlord, a role that requires dealing with tenants and weekend phone calls about plumbing problems, broken toilets etc... For those people, other real estate investment opportunities exist. 

Investing in REITs 

A real estate investment trust (REIT) is a real estate company that offers common shares to the public. In this way, a REIT stock is similar to any other stock that represents ownership in an operating business. But a REIT has two unique features: its primary business is managing groups of income-producing properties and it must distribute most of its profits as dividends. 

REIT funds shouldn't make up more than 5 to 10 percent of an investment portfolio.  

Tenant In Common Investments  

Investing money in a tenant-in-common, or TIC, property is another alternative some might want to consider.  Co-ownership allows an investor to acquire, together with other investors, a larger, potentially more stable, secure and profitable institutional quality property than what they could acquire on their own.  In addition, by acquiring a fractional interest in a number of different tenant-in-common properties, the investor can achieve greater diversification and improved quality in their investment real estate portfolio. 

These properties provide investors with passive cash flow. For a base investment of $100,000, TIC owners get access to otherwise unaffordable properties such as office buildings, shopping centers, apartment complexes or hotels in various geographic regions. 

Faced with an impending deadline, Taxpayers often rush into the acquisition of a replacement property that is not suitable to their needs.  Although the tax benefits of completing a 1031 exchange transaction are important, the economic benefits should not be ignored simply because of the 1031 exchange requirements.

There are numerous benefits to investing in real estate. Just be sure to do due diligence before making where you should invest your hard earned money.

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