Getting Into Real Estate Investing

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Some investors prefer to invest in tangible real estate instead of numbers displayed on a computer. If you’re looking to diversify your portfolio, real estate could be a viable option.

Investing in real estate offers many unique advantages, including cash flow and the potential for appreciation. It’s important to remember that cash flow is unstable and the value of a property can change due to a variety of reasons.

The buy and hold strategy is a popular one for people who are just starting out. It involves purchasing a property in order to generate rental income and potential capital appreciation. This strategy is labor intensive and requires you to thoroughly investigate and scrutinize potential investment opportunities. It’s also not very liquid that means that after a deal is completed and the money returned, you must find another opportunity to invest in.

Another way to invest in real estate is by investing in a REIT, or real estate investment trust. They raise funds from shareholders to buy and manage properties, such as apartment complexes and office buildings, strip malls, and strip centers to generate both rental incomes as well as long-term appreciation. REITs unlike individual real-estate investments are traded publicly. They provide diversification in your portfolio, separating stocks from bonds.

You can also get into real estate investment by becoming your own landlord. You can rent traditional properties or by using new business apps and brokerages that allow you to purchase a portion of a property. This is typically less costly than buying a house and allows you to keep in mind the need for a tangible asset within your portfolio while maintaining the degree of separation you desire.