Investing in real estate can be a bit overwhelming and intimidating at the beginning, for most. There are a lot of options that an investor may consider, when it comes to making the most from the real estate market. While you can always count on a reliable investment partner, such as Fig Tree Capital Ventures, to help guide the way, you too should know the basics of the market you are about to get into. That is the reason why we have put together this brief guide presenting an overview of all that you need to know when getting started with real estate investment options. Read on.
Exchange Traded Fund
One may consider investing in an ETF (exchange-traded fund). This is a collection of stocks or bonds in a single fund. Making this investment can be a smart move especially for anyone who wants to diversify and are looking at alternative real estate investment options. An example of such an investment is Vanguard’s VNQ as well as IYR which are investing in stocks from REITs which are purchasing hotels and office buildings. There are so many options available in terms of ETFs, so it may be in your best interest to seek the help of a professional if you are not experienced in ETFs.
Real Estate Mutual Funds
Investment in real estate mutual funds is another option investors could go for. An attractive feature about this real estate investment opportunity is normally placed on its low cost and perfect track record which is helping investors to be more confident about the future and gain better returns. Some of the real estate mutual funds are also backed with detailed research by prominent economists some of whom have even managed to win a Nobel Prize.
There are also real estate investment options of investing in REITS. This is an opportunity to invest in real estate without holding any physical property. REITs are a better option to invest in considering that they offer better diversification and do not correlate with other equities. There is also long-term data on REITs which help predict their profitability over time whereas the ups and downs in the traditional real-estate market can sometimes be volatile.
REITs can enable one to own real estate without necessarily being a landlord thus enabling investors to passively generate income from the investment which is a good thing for any investor. It is however, important to consider engaging only in publicly traded REITs instead of non-traded REITs. This is following the discovery that the non-traded REITs are charging high fees, lack liquidity, create undue risk and may not have value transparency.
In addition to the ones we have mentioned so far, there is another option of investing which is new home construction. Much of the growth in real estate over the past few years is attributable to limited housing inventory. There is therefore universal consensus that investments in new home construction will be generating better returns, at least in the foreseeable future. Even though one may not necessarily invest in real estate by building an apartment per se, there is the option of seeking the help of an investment specialist who has the experience and knowledge of the different options available to most qualified investors. A partner such as Fig Tree Capital Ventures has just the team to help you understand the complexities behind investing in real estate. To learn more about your real estate investment options, fill out our contact form or simply call (866) 300-2170.