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Benefits and risks of investing in real estate

Florida residents who get ahead on their finances may find themselves in the fortunate position of deciding what market to invest in. Many people may be considering stocks and real estate as potential investments. While investing in stocks is less cash intensive and takes much less of an investor's time, there are some significant benefits of investing in real estate that could make it a better choice.

Investors who are worried about inflation may be able to use real estate as a hedge against inflation. Historically, home prices and rental rates have risen along with inflation. While a real estate investment grows in value, the mortgage payments will remain the same. Another benefit of owning real estate is that many of the costs of being a landlord are tax deductible.

As with any investment, there are drawbacks to owning real estate. To purchase a piece of property, a real estate investor must have enough capital for the down payment. With this much risk involved, a sudden downturn in the real estate market could be devastating. Another drawback of owning real estate is that maintaining a property and dealing with tenant issues can be very time consuming.

A real estate investor may be able to mitigate the risks of owning property by consulting an attorney before every new purchase. An attorney may be able to investigate a piece of real estate in order to ensure that there are no hidden title issues that could cause an expensive conflict down the line. If a real estate investor wishes to develop a piece of commercial real estate, an attorney might be able to help them resolve zoning disputes.

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