Adding a property to your investment portfolio is a savvy way to earn above-average dividends, strong returns, and much-needed diversification. The two most common ways to add properties to your portfolio are to purchase spaces that will generate income or to invest in stocks and funds.
What’s a real estate portfolio?
A real estate investment portfolio is a collection of property investments, both current and past. These include investment properties, trusts, mutual funds, and properties from different asset classes such as single-family homes or commercial buildings. No two investment portfolios look the same, but the right investment opportunities can help savvy investors realize their tangible financial goals.
A great place to find alternative investments is a dual P2P crowdfunding and lending platform for high net worth investors, like the platform provided by Yieldstreet. Yieldstreet offers alternative investment asset classes in litigation finance, real estate, commercial finance, and consumer finance. An accredited investor can access high yield debt-based investments with a low correlation to the stock market.
Each type of investment is managed by experienced asset managers and comes with a short loan term. You may wonder how safe is Yieldstreet, as a new investor unfamiliar with alternative investments. The Yieldstreet platform is SEC-regulated, and all investment opportunities are asset-based, meaning each investment is backed by an underlying asset in the event of borrower default.
The basics of building a real estate portfolio.
As a new investor, it’s essential to understand the basics of approaching investment opportunities in real estate. Start by setting clear goals and a smart strategy. There are several ways to invest in property depending on your investment goals. You could go the buy-and-hold route, in which you purchase an investment property that will generate monthly income. There’s also the fix-and-flip option, in which you purchase a property in need of repairs, fix it up and sell it for a profit. Lasting, you could opt for a REIT that earns passive income.
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You’ll need to draft a business plan once you have set your financial goals and investment strategy. This plan will help you stay on track with both short-term and long-term objectives and define the strategies that will help realize your goals. The best way to approach your first investment property is to work with a real estate agent and a lender who can help you finance the best deals.
Venterra Realty is a management company that focuses on prime location mid-rise apartment homes and garden-style property listings in major US cities throughout the southern market. Venterra CEO John Foresi and Chairman of Venterra Realty Andrew Stewart prioritize personal connection with team members and creating a memorable customer experience. The property managers perform due diligence on all apartment communities in TX and other southeastern states, choosing assets that are sure to earn a solid quarterly yield.
Start with one investment property at a time and gradually add properties to your portfolio. Keeping track of multiple properties without the help of a property manager can be challenging. You’ll eventually need to add some diversification to your portfolio to ensure you are taking the least amount of risks with your investments. The most common ways to diversify are switching up your real estate market, your asset class, or your investment strategy.
Real Estate Investment Trusts and Mutual Funds
Real estate investment trusts (REITs) are shares in private or public equity stock in companies that are structured as trusts. These companies invest in real estate, mortgages, and collateralized investments such as multi-family apartment homes, grocery shopping centers, retail properties, hotels, and commercial office spaces. REITs are managed by a board of directors who make investment decisions on behalf of the trust. They pay little or no federal income tax on dividend distributions to shareholders and come with most of the advantages and disadvantages as equities. Real estate mutual funds invest in REITs and real estate operating companies with the help of portfolio managers. They help investors meet their investment strategy and diversification goals by providing broader assets beyond REIT stocks alone.
Adding a property to your investment portfolio is a smart way to earn high yields while diversifying. Building a strong portfolio won’t happen overnight, but with patience and due diligence, you can find the right investment opportunities that help you achieve your financial goals.