Getting Into Real Estate Investing

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When it comes to investing, some investors feel more comfortable with tangible real estate than numbers on a screen. If you’re looking to diversify your portfolio with a little real estate, it may be worth your while to learn more about this option.

Real estate investment comes with unique advantages, including cash flow and potential appreciation. However, it’s important to keep in mind that cash flow fluctuations can be substantially and a property’s value can increase or decrease due to a number of factors.

The buy and hold strategy is an extremely popular one for beginners. It involves purchasing the property to generate rent income and potential capital appreciation. This is a labor-intensive strategy that requires you to research and vet investments. It’s also quite illiquid, meaning that once the deal is closed and your money is returned, you must find another opportunity to invest in.

Another way to invest in real estate is to use REIT, also known as a real estate investment trust. These companies collect money from shareholders to purchase and manage properties, such as apartment complexes and office buildings strip malls, strip malls and strip centers to earn both rental incomes and long-term appreciation. Contrary to individual real estate investment, REITs are publicly traded and offer some diversification to stocks and bonds in your portfolio.

Another method to begin your journey into real investment is to become a landlord yourself. You can rent out traditional properties or using new business apps and brokerages that allow you to purchase a portion of a house. This is usually less expensive than becoming a home-owner and it allows you to make a distinction between the desire to have an asset that is physically located in your portfolio with the level of detachment you’d like from your investment decisions.