I have a domain name that can be entered with or without hyphens. I decided to use the hyphenated version because I thought it would be better for SEO to have the keywords distinct. It is almost certain that people will be typing in the URL without hyphens also. What I did is added the non-hyphenated URL to my hosting as a parked domain and then created a 301 redirect to go to the hyphenated version. I am wondering if there are any caveats to doing this and if there is a better technique. I remember reading that Google doesn't like redirected domain names.
It's true that google does not prefer redirected domain names, but if you do all of your main SEO on the hyphenated version, you will be perfectly fine. No reason to do work on two different domains.. Google would treat them as two different sites. For example, I 301 redirect my site freelayouticons[.]com to www[.]freelayouticons[.]com because google treats both versions as different sites. This would be the same type of situation you're in, just with non-hyphenated, and hyphenated. So no worries!
Actually, GoogleBot for being a "billion" dollar technology can pull the keywords with the hyphen; in fact you would be better off without. Only in rare cases does Google pull inaccurate keywords from a domain name with no hypens and this should be the main reason to use a hypen beyond the non-hypen version not being readily available. Example: ExpertsExchange.com (Experts Exchange) Will can be seen as.... Expert Sex Change
Well, there is margin for error with the keywords when there are no hyphens in the domain name. I decided it would be best to go with the hyphens for SEO and redirect the non-hyphenated version for convenience to the visitor typing the domain name. I have setup 301 redirects to have the URL without www and also to remove trailing slash. I just wanted to make sure that setting up a full domain name redirect wouldn't kick in some sort of Google penalty.