1. Investing in a rental property
People will always need a place to live and positioning yourself to be a supplier of housing can be a smart investment. Moreover, given that the value of real estate tends to rise over time, your rental properties may increase in value even as tenants are paying you to occupy them.
This means a steady source of passive income, on top of appreciation.
There are tax advantages to being a landlord as well. Creating an LLC for your holdings can provide business deductions. You can deduct the costs of property insurance, taxes and certain types of repairs from your taxes. Depreciation and mortgage interest can also garner you tax breaks.
Granted, there are some downsides as well. These include the tasks associated with managing the properties, such as advertising and showing vacancies, vetting would-be tenants and evicting non-paying individuals. There are also certain legal concerns against which you must be careful to indemnify yourself. You must also maintain your properties in order to keep your tenants safe and maximize the income potential of your holdings.
Still, even with these potential detriments, when it comes to ways to build wealth, rental property investments have been the foundation of many a family fortune.