Your main choice will come down to whether or not to buy property outright or invest through a REIT, which is short for real estate investment trust. Both have their own advantages and disadvantages, but they can each have a place in a well-built investment portfolio.
One major advantage of real estate is that if you are comfortable using debt, you can drastically increase your withdrawal rate because the property itself will keep pace with inflation. This method is not without risk but for those who know their local market, can value a house, and have other income, cash savings, and reserves to protect them if the property is vacant for an extended period of time or loses value, you might be able to effectively double the amount of monthly income you could generate.
If Real Estate Offers Higher Returns for Income Investing Why Not Just Put 100% In Property?
This question is often asked when people see that they can double, or even triple, the monthly cash flow they earn by buying property instead of stocks or bonds, using bank mortgages to acquire more houses, apartments, or land than they could otherwise afford.There are several reasons:
1. If the real estate market falls, the loss is amplified by leverage.
2. Real estate requires more work than stocks and bonds due to lawsuits, maintenance, taxes, insurance, and more.
3. On an inflation-adjusted basis, the long-term growth in stock values has always beat real estate.
