Trying to diversify your portfolio can be an incredibly overwhelming task. Depending on who you talk to and what their thoughts on investing are, you could get a hundred different opinions. So the question is, how much real estate belongs in your investment portfolio? Traditional advisers fall back on rules of thumb. Believing that the best and safest wealth generator over the long term was investment in public markets. Therefore, the estimate has been somewhere around 10%. But these days, with the influx of public information, as well as the ability to invest in larger, more syndicated properties, even as an individual, you have the ability to invest in more real estate than has been the norm over the years.
Why Diversify?
The old adage that you shouldn’t put all of your eggs in one basket definitely rings true when it comes to real estate, or any investment for that fact. The idea is that if you invest everything into one company and that company goes out of business or hits a financial crisis, you are truly up a creek without a paddle and you are at risk for a great loss. However, if you choose to invest wisely in a number of assets, you will have the ability to coast, even if one of your investments find themselves in a crisis. Diversification is key to any investing, not just in the real estate market. But it is also wise to diversify your real estate holdings. Investing in many properties of kinds will help you to grow quickly and steadily.
Where Are You At?
The first question you have to ask is, where are you at? What kind of investments do you already have? And more importantly, what is there stability in the market? Is the rest of your portfolio in more conservative investments? If so, then you may be able to invest more heavily in real estate than if you are primarily invested in more risky investments.
Is Multifamily Right For You?
Multifamily real estate may be a great option to add to your portfolio, as it can withstand a lot more trauma than residential real estate. Multifamily real estate can also give you more control over the performance in the market. If you are looking for short, medium and long-term investing opportunities, multifamily may be for you as it can offer a large range of income. It is also a good mix of venture capital and the stock market and the negative returns of bonds and cash.
Are you interested in investing to add value properties that happen to be situated in popular housing markets? Let us help! Magnolia Design Properties is a real estate investment company that is honed in on add value multifamily properties in the B+/ B- class and we would love to have you join us in investing! Let us do the heavy lifting of property acquisition, and head over to our contact page and fill out the form so that we can contact you with information about investment opportunities that you can join us in!
