Getting Into Real Estate Investing

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Certain investors prefer investing in tangible real estate instead of numbers on a computer screen. So, if you’re considering diversifying your portfolio with a little real estate, it could be worthwhile to learn more about this option.

A real estate investment can bring many unique advantages, including cash flow and the potential for appreciation. It is important to keep in mind that cash flow can be fluctuating and the value of a property may change due to a variety of reasons.

The buy and hold strategy is a very popular one for those who are new to the field. It involves buying the property to earn rent income and potential capital appreciation. This strategy is labor-intensive and requires you to fully investigate and scrutinize possible investment opportunities. It’s also relatively illiquid that means that after a deal is completed and the money returned you’ll need to find a new opportunity to invest in.

Another option to invest in real estate is to invest through a REIT, or real estate investment trust. These companies raise funds from shareholders to purchase and manage properties like office buildings, apartment complexes and strip malls, which can be used for rental income and long-term appreciation. REITs unlike individual real estate investment funds, are traded on the stock exchanges. They offer diversification to your portfolio from stocks and bonds.

You can also get into real estate investment by becoming your own landlord. You can do this by renting traditional properties or by making use of new business applications and brokerages which allow you to buy a small part of a property. This method is typically less costly than becoming a home-owner and it allows you to balance your desire for an actual asset in your portfolio with the degree of separation you desire from your investment decisions.