Getting Into Real Estate Investing

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Some investors prefer investing in tangible real estate over numbers on a computer screen. If you’re trying to diversify your portfolio, real estate might be a good option.

The investment in real estate can provide several unique advantages, such as cash flow and the possibility of appreciation. It is important to note that cash flow fluctuations can be substantially and the value of a home can increase or decrease due to a number of factors.

An approach that is popular for beginners is the buy and hold strategy, which involves purchasing the property in order to earn rental income as well as potential capital appreciation over time. This is a labor-intensive strategy and requires you to meticulously examine and assess possible investment opportunities. It’s also quite illiquid, meaning that once the deal is closed and your money is returned it is time to find another opportunity to invest in.

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

One last way to get into real estate investing is by becoming a landlord for yourself. This can be accomplished through traditional rental properties or by making use of new business apps and brokerages that allow you to buy a small portion of an investment property. This method is typically less costly than becoming a home owner and allows you to be able to balance the desire for an asset that is physically located in your portfolio with the degree of separation you’d like from your investment choices.