Investing in real estate is one of the best ways to diversify your portfolio and make money while simultaneously providing an income stream. In addition to generating income from rent, real estate will also increase in value once sold, making it a lucrative way to increase your money. Unlike stocks and bonds, real estate is more affordable to everyday individuals. However, it does require time, patience, and cash, so this type of investment is not for the faint of heart.
As with any other investment, real estate investment involves risks and costs. Therefore, it is essential to plan for these costs in advance. If you can, invest only as much as you can afford to lose. You should start to invest in a small number of properties, rather than attempting to manage many properties. If you are unsure of where to invest, consult a professional before making any decisions. If you do not have the time to dedicate to research, you can start small by investing in a REIT.
If you’re not ready to take on the risk of investing in real estate yourself, you can invest in exchange-traded funds (ETFs). These funds invest in multiple properties owned by different companies, often REITs. Since they’re like mutual funds, ETFs can provide a broad portfolio diversification while maintaining low costs of management. Some ETFs also have stakes in REITs, including Vanguard and TIAA-CREF.