Alternative Investments can provide lucrative returns that are unavailable by investing in the stock or bond market. In earlier posts, we discussed alternative investments in farmland, rooftop solar system, private equity, and collectibles. In this article we discuss investing in one of the most popular forms of alternative investment – Real Estate. Note that investing in farmland is also a form of real estate investing, but I figured that farmland had a special case which deserved its own post.
As mentioned, investing in real estate is one of the most popular forms of investing as it is easy to understand and provides one of the most basic needs of human survivability – shelter. There are multiple options for investing in real estate: one can invest in a piece of land and hold it for capital gains, or invest in a house/condo/multi-family units and rent it out to generate cash flow while holding the property for capital gains or purchase shares in a real estate investment trust (REIT) company.
Alternative Investments – Real Estate
Investing in a property is usually capital intensive, as a downpayment is usually necessary. However, due to the availability and popularity, investing in real estate investment trusts (REITs) is a breeze with companies easily available to trade on the stock exchanges. Investing via REITs provides some advantages as well – in that you can compare one business against another and pick to choose the best one. Also, when buying shares in REITs, it is easy to liquidate funds which may not be possible with owning your own property. A few weeks ago, Robert Baillieul guest posted on this blog on how to invest and collect monthly rents without becoming a landlord.