A diversified portfolio doesn’t mean only owning stocks and market-based investments.
When investors discuss diversification, they are looking for a strategy to maximize growth and limit loss. What investments exist outside the market? Adding property-based investments can bring lifetime value.
Your real estate portfolio can be diversified in the same way as your securities, by investing in different types of properties. Today, many options exist, including holiday rentals, house-flipping, commercial properties, and large residential projects. An estate agent can be very helpful in understanding what rate of return each could provide.
Other options include Real Estate Investment Trusts (REITs), which offer common shares to finance real estate. You want your investments to pay off in a way that suits you, whether that is over the short term or long term.
A real estate agent will be your best guide to finding opportunities to invest in property. As professionals with their finger on the pulse of the property market, they develop a deep understanding of trends and value. An estate agent will be able to guide you toward the right kind of property investment to achieve the return you’re looking for within your desired timeframe.
If you are looking for long-term value, such as investing in property for your children, you might not necessarily need to get a quick return on this investment. Instead, you are providing for your offspring and setting them up for a successful future. This could be in the form of a residential or investment property.
For short-term returns, a different approach may be needed. Some investors develop a knack for identifying undervalued properties or ones with potential for significant value increases through conversion. Working on these properties in order to resell them in the short term—sometimes called house-flipping—requires significant market knowledge and project management skills.
With the rise of the sharing economy, property investment has become more accessible. Those looking to invest their capital and make a steady return often opt for a buy-to-let strategy. An estate agent can guide buyers toward the best location and type of property for this investment, based on their budget.
Sometimes a property will require some work or furnishing before it’s ready for tenants. Again, an estate agent can help with pricing and any legal requirements, while also bringing the property to the rental market.
The best kind of investment is a passive one—bringing in a return with minimal effort.
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