Although most financial planners advise their clients, investing in real estate should be a central component of an overall investment strategy, it is important to fully consider personal needs, limitations, goals and priorities best ways, proceed and invest wisely, for one’s general and personal financial situation. Some invest in real estate, passively, buying shares in a Real Estate Investment Trust (REIT), but, it must be understood, not all are the same and there are challenges and limitations. Others become shareholders, or minor / limited partners, in someone else’s project. Another approach is to invest in real estate, buying specific and smaller investment properties, such as two-family homes and / or smaller single-family homes. Some participate in larger projects, because they can and are willing to do so. Regardless of how you proceed, it is important to do it wisely and in a well-considered, focused way. With that in mind, this article will briefly attempt to consider, examine, review and discuss what this means and represents, and a smart approach to investing and engaging in real estate.

1. Home / personal residence: Although most people buy a home, because it makes sense, to them, and many consider it part of the so-called American Dream, it would be wise to consider price, neighborhood, and other relevant aspects. Financial considerations

two. Real Estate Investment Trust (REIT): Some get involved by buying shares in a Real Estate Investment Trust, which is often referred to as, REIT. These vehicles are somewhat similar to stocks and other securities, but with some significant differences. The first rule of thumb should be, to realize, all projects are not the same, and some backers have a much better track record than others. Also, past performance is not a guarantee, going forward. Another problem is that there is often very limited liquidity, for them, during specific periods, so if you need liquidity, these are probably not for them. Year REIT it should be considered, when appropriate for an individual, after the pros and cons, as well as the potential risks and rewards, are carefully realized. Buying these means that one is buying a partial or limited ownership position on a specific project.

3. Investment, residential property: Some are drawn to participate in residential investment properties, be it multi-family homes or a single unit, which is being bought, to rent, for investment purposes. Consider cash flow, rate of return, initial funds, necessary funds, reserve funds, and personal comfort zone, issues related to the responsibilities of being a homeowner.

Four. Larger projects: Richer individuals often participate through larger investments. However, the same considerations – and what the risks may be, versus the rewards – need to be thoroughly considered from the outset.

For most, it is worth considering investing in real estate as a component of the financial / investment portfolio. However, before doing so, it is important to do it in a smart and well-considered manner.