Traditional investment vehicles can be volatile. With a good strategy you could win big. That same strategy, by no fault of your own, could end up costing you. One way that real estate makes sense as an alternative investment is in its stability. Here are 3 other ways that mixing real estate into your portfolio as an alternative investment makes sense.
#1: A More Diverse Portfolio Can Mean Better Returns
Typical alternative investments like precious metals, natural resources, and art for example, can be sound additions to a diverse portfolio. Real estate can make even more sense because of the potential returns.
New investors think purchasing property when thinking of real estate as an investment. The problem with buying property to invest in is that you have to pay to maintain and operate that property. Real estate investments such as funds and private equity real estate investments do not carry these same responsibilities.
By investing indirectly, you gain the potential to reap the rewards without the work.
#2: Help During Turbulent Markets
Real estate markets can be volatile, as the early part of this decade showed. But compared to stocks and bonds, real estate investments are rarely subject to massive swings in value. With a diverse portfolio that includes real estate, if your stocks and bonds take a dive, you still maintain the opportunity for a secure avenue of income from your real estate investments.
Real estate can not only offer portfolio diversification, but you can also diversify the types of real estate within your portfolio to include things like shopping malls, condo buildings, office space, multi-family homes, etc.
#3: There are Several Innovative Ways to Invest in Real Estate as an Alternative
Lastly, there are many different ways to invest in real estate as an alternative investment. Some vehicles have been tried and true and some are new and trending. For example, many new investors are seeing opportunities in owning multi-family units to work toward maintaining a healthy stream of residual income.
Don’t Overlook Real Estate
It boils down to the fact that real estate should not be overlooked as an alternative investment, particularly if you are an HNWI. Our team is here to help you in the effort to make lasting wealth with your investments. Talk to us today about ways to diversify your portfolio.