When it comes to investing in real estate there are a lot of different considerations. But those issues may be just a little bit different for professional athletes, because they often have very large salaries for a limited number of years. Since they generally end their careers at a much younger “retirement” age than would be seen with other professions, they will want (and often need) to plan for that future in a different way. Investing in real estate the right way when they are younger and in their prime can help protect them when they are older. Here are three different kinds of properties to consider.
Investing in Residential Real Estate
The main investment for a lot of people who are interested in real estate is the residential property, and professional athletes are no different when looking for strong ways to invest. These generally refer to houses, but once investors start getting into multi-family properties that can move into the realm of commercial properties. However, some people still consider them to be residential because they are used for people to live in, instead of companies to work from. How “residential” and “commercial” is defined can depend on who is creating the definition. It can mean homes vs. businesses, or single-family houses vs. everything else.
Choosing Commercial Real Estate Ventures
Commercial real estate – whether that includes multi-family dwellings or only buildings that are designed for companies and businesses to operate from – is another great way for investors to build wealth through real estate. Pro athletes who choose this option as a part of their portfolio can focus on making sure they buy buildings that are generally in locations where they will be rented the vast majority of the time. Without the right location for a commercial property, there is more risk to the investor because of the expenses that come with these larger, higher-priced properties. They need to bring in strong revenue to be a successful part of a real estate investment strategy.
Vacation Real Estate Investing for Income
In addition to the most common types of commercial and residential real estate, there are vacation real estate options. These vacation homes, condos, time-share communities, and more can be good investments if they are in locations where people travel frequently and where they are focused on fair prices and frequent visits. Some of these options are seasonal and that can be a good choice, as well, as long as the season is long enough and strong enough to provide the needed level of revenue. Buying seasonal vacation properties comes with a higher level of financial risk, though, so it generally shouldn’t be a big part of the portfolio.
How Real Estate Investing Works
There are two ways to invest in real estate. One is through fixing up houses and flipping them for a profit. The other is through buying properties and renting them out. Both can be excellent strategies, but the option to have rentals is often a better choice for anyone who may not have a guaranteed income, or whose income may change drastically for the worse as they age. For a professional athlete, getting older means a decreased chance of continuing to play a sport at a competitive level. With real estate investments, income will continue to come in well after an athletic career has ended. Real estate is an investment in a more secure future.
The Long-Term Potential of Real Estate Investment
Over the long term, there is a great deal of potential in real estate investment. In many cases there are opportunities to get in on the ground floor of a particular location or project. There are also people who need to sell their homes or commercial buildings quickly or inexpensively, and when they do that an investor can pick up some very good deals. Because real estate is a solid investment in a physical item, it can be among the best investment strategies for long-term income and success. The value of real estate generally rises, as well, so an investment made today can be worth significantly more in the long term. That makes it well worth today’s investment dollars.