Real Estate As Portfolio Diversification

Real estate is more than just buying or selling a home, it’s an excellent way to diversify your asset portfolio. In this day and age any investment firm will tell you diversification is essential. Having all of your retirement assets in a 401(k), pension or other retirement account is only one way to prepare for your retirement. Real estate allows you to diversify your retirement income and generate immediate cash flow to compliment current income.

Contrary to popular belief, you don’t need to be rich to start investing in real estate. Financing is readily available. Finding the right investment property is all about taking the time to research individual properties and discover where the “value add” is. Investing locally is important so you know the area and its economics; you’ll need to be able to calculate the rents you can get. What renters are your target demographic? Will you need to do any renovation once purchased? Understanding price vs. value is critical so you don’t over pay.

If you have the time and passion, real estate can provide an excellent platform for diversification and passive income. You’re tenants can pay off your mortgage and you can receive monthly cash on top of that. There is excellent literature out there to get educated on how this works. It’s fun to learn. Rod Khleif is one of my favorite real estate investors. He has a podcast, “The Lifetime Cashflow, with Rod Khleif” that is an excellent source of information. The below podcast goes into details on a multi-unit investor who’s built a portfolio of over 700 units valued at over $60MM. It’s a fascinating story and great source of knowledge for those looking to diversify.

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