When it is time to invest, some investors feel more comfortable with tangible estate than numbers on screens. If you’re trying to diversify your portfolio, real estate might be a good option.
Real estate investment offers unique benefits such as cash flow and the potential for appreciation. However, it’s important to note that cash flow fluctuations can be drastically and a property’s value can increase or decrease due to a variety of factors.
The buy and hold strategy is a popular one for beginners. It involves purchasing the property to generate rental income and potential capital appreciation. This is a time-consuming strategy that requires you to study and research investments. It’s also a fairly unliquid strategy, meaning that you will need to find a new investment opportunity after the deal is completed and the money has been returned.
Another option to invest in real estate is to invest through REIT, which is a real estate investment trust. They raise funds from shareholders to purchase and manage properties such as apartment complexes and office buildings strip malls, strip malls and strip centers for both rental incomes as well as long-term appreciation. REITs unlike individual real estate investment funds, are traded in the public market. They can provide diversification in your portfolio from stocks and bonds.
You can also invest in real estate investment by becoming your own landlord. This is possible through traditional rental properties or utilizing new business apps and brokerages that allow you to purchase a portion of an investment property. This is usually less expensive than becoming a home owner and lets you make a distinction between the desire to have physical assets in your portfolio while maintaining the level of detachment that you want from your investment decisions.
