By diversifying your portfolio you can reduce the impact of a specific under-performing asset within your portfolio. It is possible to diversify within your real estate portfolio by investing in different property types.
Types of Property
There are four broad types of income-producing real estate: offices, retail, industrial and leased residential. There are many other less common types as well, such as hotels, mini-storage, parking lots and seniors care housing.
Non-income-producing investments, such as houses, vacation properties or vacant commercial buildings, are as sound as income-producing investments. Unlike income producing real estate if you invest equity in a non-income producing property you will not receive any rent, all of your return will be through capital appreciation.
A real estate investment consultant can help you decide which real estate investment is right for you.
- Determine your financial goals and risk tolerance.
- Develop a solid investment plan tailored to your situation.
- Provide guidance and expertise on buying and selling real estate.
- Assess the potential risks and rewards of various investment options.
- Monitor your investments over time and ensure your asset allocation remains appropriate as your situation changes.
- Offer support and guidance during periods of market volatility