However, once you purchase a home, it becomes an important part of your portfolio, because it serves a dual role as not only an investment, but also a centerpiece to your daily life.
Although a home is one of the largest investments an average investor will purchase, there are other types of real estate investments worth investing in, such as income-producing real estate.
Large income-producing real estate properties are commonly purchased by high net-worth individuals and institutions, such as life insurance companies, real estate investment trusts (REIT) and pension funds, etc.
Income-producing properties are also purchased by individual investors in the form of smaller apartment buildings, duplexes or even a single-family homes or condominiums that are rented out to tenants.
Real Estate is conventionally seen as an Alternative Investment Class, when it comes to the issue of portfolio investing. This implies that it is an extra investment used to build on a basic portfolio of stocks, bonds and mutual funds, etc.
One of the main contrast between investing in a piece of real estate as compared to stocks or bonds, is that real estate is an investment in the physical aspects of a building and the land it is built upon. This makes real estate highly tangible, because unlike most stocks you can see and touch your property.
This often creates substantial pride of ownership, but tangibility also has its downside because real estate requires hands-on management. For instance, you don't need to unplug the toilet of a stock or mow the lawn of a bond.
Source: Investopedia.com
0 comments:
Post a Comment