3 Ways to Easily Diversify Your Real Estate Investing Portfolio When investors talk about diversifying their portfolios, they usually want to find the most stable investment asset classes on the market. For most, real estate is an obvious choice, but many investors are finding that there are actually multiple ways to invest in real estate and that they can build an entire real estate investment portfolio. Of course, once you start to build a new portfolio, you’ll need to find the best ways to diversify it to ensure your success. Here are a few of our favorite ways to diversify your real estate investment portfolio. Invest with an REIT Real estate investment trusts (REITs) are corporations that use investors’ pooled capital to fund commercial and multifamily residential properties and developments. When you invest with an REIT, you will buy shares of the trust itself, which will represent equity in the development(s) the trust is investing in. You can then sell your shares whenever you want or hold onto them to continue to collect quarterly payments based on your equity. REIT investments are truly passive, and they are a great way to add some diversification to your real estate investment portfolio. Invest in Medical Real Estate Since the enactment of the Affordable Care Act, more Americans than ever before have health insurance and are taking advantage of healthcare services. This has led to a huge increase in the demand for general practitioners’ offices, specialists’ offices and clinics, senior care, hospitals, and other medical services. Investors are taking advantage of this increase in demand by funding medical real estate projects all over the country. Investing in a medical facility could create more cash flow for you while stabilizing your portfolio, as it’s a very low-risk investment. Real Estate Crowdfunding
If you are interested in pooling your investment capital with other investors’ capital to fund a larger project but you want to decide exactly where your funds go, you might want to consider real estate crowdfunding. As with other crowdfunding efforts, developers are running campaigns to get part or all of their projects funded by multiple smaller investments, rather than looking for a single large investor. When you opt to invest in real estate through a crowdfunding platform, you’ll research the properties that you want to invest in, and you’ll allocate as much or as little capital to each as you prefer. Dividing your investment capital between several developments like this is a great way to hedge against problems with construction and other issues that could stand in the way of a property’s success. In other words, it’s a great way to diversify and stabilize your portfolio. These are just three of the many ways you can diversify your real estate investment portfolio. Each of them gives you the means to invest in multiple properties and to place your funds with investments that are most likely to grow your wealth now and in the future. Consider using one or all of these methods to create a stable and profitable real estate portfolio today.