When it is time to invest certain investors feel more comfortable with tangible estate than numbers on screens. If you’re considering diversifying your portfolio by investing in real estate, it could be worthwhile to know more about this option.
A real estate investment can bring certain advantages, including cash flow and the potential for appreciation. It is important to be aware that cash flow can be fluctuating and the value of a property could change due to a variety of reasons.
An effective strategy for novices is the buy and hold strategy which involves the purchase of an investment property to earn rental income and potential capital appreciation over time. This strategy is labor intensive and requires you to carefully investigate and scrutinize potential investment opportunities. It’s also a somewhat unliquid strategy, meaning you’ll need to find another investment opportunity once the deal is complete and the money has been refunded.
A REIT (real estate investment trust) is another way to invest in property. They raise funds from shareholders to buy and manage properties like office buildings, apartment complexes strip malls, strip malls and strip centers to earn both rental incomes as well as long-term appreciation. Unlike individual real estate investments REITs are listed on the market and can provide a little diversification from stocks and bonds in your portfolio.
You can also make a start in real estate investing by becoming your own landlord. This can be done through traditional rental properties or making use of new business apps and brokerages that permit you to buy a small portion of a property. This approach is often easier than becoming a home-owner and allows you to be able to balance the desire for a physical asset in your portfolio while maintaining the level of detachment you’d like from your investment choices.
