Getting Into Real Estate Investing
When it comes to investing certain investors are more comfortable with tangible property than numbers displayed on a screen. If you’re considering diversifying your portfolio with a little real estate, it could be worth your while to learn more about this option.
Investing in real estate offers certain advantages, including cash flow and the potential for appreciation. It’s important to consider that cash flow is volatile and that the value of a home can fluctuate due to a variety of factors.
The buy and hold strategy is an extremely popular option for novices. It involves purchasing the property to earn rent income and potential capital appreciation. This strategy is labor intensive and requires you to carefully investigate and scrutinize possible investment opportunities. It’s also an liquid strategy, which means you’ll need to look for a new investment opportunity once the deal is completed and the money has been refunded.
A REIT (real estate investment trust) is a different method to invest in property. They raise funds from shareholders to buy and manage properties like apartment complexes and office buildings, strip malls and strip centers for both rental incomes as well as long-term appreciation. Contrary to individual real estate investment REITs are publicly traded and can provide a little diversification from stocks and bonds in your portfolio.
One last way to begin real property investing is to become a landlord for yourself. This can be done by purchasing traditional rental properties or using new business applications and brokerages that allow you to purchase a small portion of the property. This is often easier than buying a house and lets you make a distinction between the desire to have an asset that is tangible in your portfolio while retaining the level of detachment you want.