Although many investors have a real estate investment in their portfolio, adding other real estate types can help diversify their assets and protect them from market volatility. There are various advantages and disadvantages to investing in real estate. Here are some of the different investments you can make and what to expect from them.

 

Rentals

One of the most common types of real estate investment is rental property. This allows investors to get into the market and buy a residential property. Landlords are responsible for maintenance and repairs of the property, as well as paying property taxes. You may also be required to pay for the utilities and other expenses. One of the main advantages of investing in rental property is that it allows investors to get a steady stream of income from their rental income.

 

Real Estate Investment Trusts

If you’re not ready to commit to a full-time job and can’t afford to spend a lot of money on a rental property, a real estate investment trust (REIT) can be an ideal way to start investing in the market. These are publicly traded companies that own and manage various types of real estate. Since they trade on stock exchanges, a real estate investment trust can have liquidity.

 

Property Renovation

Another common type of real estate investment is property renovation. This can be a risky and challenging option, but it can be profitable if you’re willing to put in a small down payment and keep the costs low.

If you’re thinking about flipping houses, be smart and make sure to exit the market when it gets too hot. Knowing when to exit can save money in the long-term.

 

RELPs

A real estate limited partnership is a type of investment that is similar to a hedge fund. It’s usually structured like this: There are limited partners and a general partner. The general partner is the real estate company that takes on all liability.

Unlike other types of real estate investment, real estate limited partnerships are more passive. The general partner usually recruits new investors and then sets up the partnership. These individuals then receive a K-1 form to report their income.

Getting into the real estate market can be intimidating for some people. There are many different types of investors out there, and they can all be equipped with the necessary skills and time to make a successful investment. The most important thing to remember is to get started and let your investment start growing.