Investing in real estate is one of the oldest forms of investing, predating the stock market and many other popular investment types. Since the development of property rights, which created the first “defensible property” and the ability to truly sell a property for financial gain, the development and marketing of real estate has been a popular practice, and can be an attractive addition to portfolios for new and seasoned savers alike.
One key reason for its popularity is the numerous forms that investing in real estate types, which range from lending to property management (with many options in between). The plethora of options that prospective real estate investors have at their disposal can be enticing, but any seasoned investor of any type will tell you the kind of research, commitment, and dedication it takes.
However, investing in real estate is also fraught with uncertainty for many individuals, due to a lack of understanding, or a misunderstanding, of the basics: terms, property types, processes, and other fundamentals. Here are a few questions you may have: What is a mortgage agreement? What is a market? What are the different types of commercial property types? How do I get started?
There’s a lot of information to cover. Just like investing in anything else out there, real estate comes with risks and advantages, and it isn’t right for everyone.
Let’s clear this up right away: You should always consult with your financial advisor before making any decisions to pursue real estate as an addition to your portfolio. Your wealth and investment strategies are your own, and your financial advisor is there to help you succeed.
As you go into that discussion to receive guidance and assess your personal investment strategies, it’s always helpful to have some basic research and information under your belt. A robust understanding of the field at large is crucial to create a strong foundation that you can build on with your financial advisor, through your first investments, and over (potentially) many years to come.