Even as a new investor, you may be qualified to become an alternative investor.
Alternative investments can come in a wide variety of forms—rare art, commodities—but it’s easier to make a passive investment than it is to sell a piece of art on eBay, and for new investors, alternative investments like real estate are a great option.
If you’re interested in looking beyond the stock market and diversifying your options as a new investor, consider the benefits of passive real estate investments.
Don’t want to become a landlord? You don’t have to.
You don’t even need to purchase a property in order to invest in real estate. For new investors, this can be a great way of tipping the toe into the water of diversification.
As a new investor, you’re able to take a hands-off approach and earn a return at the same time. If you’re looking for a hands-off approach, then you may want to look into REITs.
The real estate investment trust, or REIT, is a publicly-traded company that owns the mortgage or those income-producing properties. The value of a commercial or residential property benefits the investor who decides to invest in REITs. You can purchase those directly through a company. Ultimately, investing with a REIT is like buying a share of stock.
If you are looking for a hands-on approach, real estate syndications might be what you’re looking for. How you choose to invest in real estate will depend on your qualifications.
While many new investors invest in single-family residencies, multifamily residencies can offer an even more profitable cashflow. If your building has a high occupancy rate, then, of course, your rates will go up. In addition, you’ll hedge against inflation as rent rates go up.
In comparison to the impact of vacancy on a single-family home, just one vacancy in an income-generating multifamily property will impact your bottom line far less.
Issues with liquidity inherent to passive investments like real estate mean that investments can’t access their investments as easily as they’d like to, making liquidity an issue. Still, those investing in real estate won’t have the headache of property management while still reaping the appreciation benefits.
What’s the future of real estate investments?
The demand for multifamily housing will remain stable when apartments are closely tied to demographic shifts and trends, like younger generations growing older and becoming chronic renters.
Over the upcoming years, there will be a strong influx of renters as younger generations grow up and begin renting, and millennials continue renting for the foreseeable future. Starter homes remain less available when baby boomers tend to stay in their homes for life.
Get the advice you need.
As a new investor, you want to be diligent about the types of assets you invest in and consider all your options.
It’s common to look toward the stock market as a new investor looking to test out the waters, but alternative investments are growing in popularity. If you’re interested in investing in an alternative investment like REITs, let’s talk about tangible assets that have appealing returns.