Some investors prefer investing in tangible real estate instead of numbers on a computer screen. If you’re trying to diversify your portfolio, real estate might be a great option.
Real estate investment has unique advantages, including cash flow and potential appreciation. It is important to be aware that cash flow can be unstable and the value of a property could change due to many factors.
The buy and hold strategy is a popular one for people who are just starting out. It involves buying an investment property to generate rent income and potential capital appreciation. This is a time-consuming strategy that requires you to research and vet investment opportunities. It’s also quite illiquid which means that once the deal is concluded and your money has been returned you’ll need to find a new opportunity to invest in.
A REIT (real estate investment trust) is a different method to invest in property. These companies solicit money from shareholders to purchase and manage properties such as office buildings and apartment complexes, strip malls and strip centres for both rental incomes and long-term appreciation. REITs unlike individual real estate investments, are traded in the public market. They can diversify your portfolio from stocks and bonds.
One final way to start your journey into real estate investing is to become an owner yourself. This can be accomplished through traditional rental properties or making use of new business apps and brokerages that allow you to purchase a portion of the property. This is usually less expensive than buying a home and allows you to make a distinction between the desire to have an asset that is tangible within your portfolio while maintaining the degree of separation you desire.
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