Real investment in real estate is a smart idea as the housing market is recovering and rents are increasing. It’s a great way to diversify your portfolio and help protect it from stock market volatility however, it’s not for all. If you decide to invest in individual properties or a complete project, you should always make sure that you have enough reserves of cash and are able to meet the risk of unexpected expenses.

Real estate investment trusts (REITs) are publicly traded companies that own and manage a portfolio of real estate assets. Dividends are the principal method they distribute their earnings. They are a great option for investors who want to diversify their portfolios through real estate, but who do not have the time, or the resources to manage the properties themselves.

Another option that investors are able to take advantage of is real estate crowdfunding. It connects investors seeking attractive returns with developers who are seeking to finance large projects. These investments could provide higher returns than traditional bonds and stocks, but they also require more effort and liquidity from the investor.

Many homeowners rent out their home or even their entire home as an investment. This type of passive income is a solid source of revenue however it has the potential that you could lose your home to foreclosure or be faced with expensive repairs. This is a possibility you should carefully consider before investing in residential real property.

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