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Real Estate Investing

Real estate investing sounds like a fun way to spend money. You can invest physically by buying up rental properties, and retiring on their equity when you get older, or you could invest in things such as real estate investment trusts (REITs) which pay dividends — 90% of their taxable income to be precise.

Instead of physically buying property, an REIT is a vehicle to get into real estate investing an easier way. A REIT invests in real estate like commercial properties and provides ownership to investors who want the benefits of owning property, but also want to avoid the potential hassles associated with owning real estate.

REITs are also known to experience capital appreciation more than other investments. This means that the REIT’s market price rises between the time of purchase and the time of being sold, and the capital appreciation is the difference between the two values. Invest in the right REIT and you’ll be holding a low-risk, diversified investment that can pay dividend income when you get to retirement age.

Physical real estate investing has its perks too. For one, you have total control over how much you rent, how you market, and when you sell your own properties. Of course, that doesn’t necessarily outweigh the maintenance, property taxes, and other elements of property ownership that comes with it. However, if this interests you because you want to buy foreclosed homes and flip them, and have a background in carpentry and home building or renovation, this could be the route for you and it can be very lucrative in the right market.