Getting Into Real Estate Investing

Certain investors prefer investing in tangible real estate rather than numbers on a computer screen. If you’re trying to diversify your portfolio, real estate may be a great option.

Real estate investing offers many unique advantages, including cash flow and the possibility of appreciation. However, it’s important to keep in mind that cash flow fluctuations can be dramatically and the value of a property could increase or decrease due to a number of factors.

An approach that is popular for beginners is the buy and hold approach, which involves purchasing the property to earn rental income as well as potential capital appreciation click here to read over time. This is a labor-intensive method that requires you to research and vet investments. It’s also not very liquid which means that once the deal is closed and the money returned you’ll need to find a new opportunity to invest in.

A REIT (real estate investment trust) is a different way to invest in property. These companies raise funds from shareholders to purchase and manage properties like apartment complexes, office buildings and strip malls to earn rent income and long-term appreciation. Unlike individual real estate investments REITs are traded on the stock exchange and offer a bit of diversification from stocks and bonds in your portfolio.

One last way to begin real investment is to become an owner yourself. You can do this by renting traditional properties or by making use of new business applications and brokerages that allow you to purchase a portion of a home. This is typically less costly than buying a house and allows you to keep in mind the need for a tangible asset in your portfolio while maintaining the level of detachment you desire.