Real estate investors know it better than anyone: diversity in your real estate portfolio is the starting point for a successful annual result. Nevertheless, there are real estate investors who focus on a niche. In this article, you will discover why diversity in your real estate portfolio is essential and how you can expand your portfolio in an easily accessible way.

diversify real estate portfolio

What is a real estate portfolio?

If you step into the world of investments, you will quickly come across the term portfolio. The portfolio refers to all the products that investors have invested in. In the real estate portfolio, for example, you come across different types of real estate, including residential real estate, commercial real estate, recreational real estate and healthcare real estate. As a real estate investor, it is important to look at different types of real estate because each niche carries specific risks.

Why is diversity in your real estate portfolio important?

With a diverse real estate portfolio, you will have the opportunity to build a passive income. In fact, by focusing on different types of real estate, you spread the risks. A diverse real estate portfolio has a much lower risk than an investment in one or a few types of real estate, while the expected return is about the same or even higher. This is because certain events, which cannot always be predicted, are favorable for one investment, and unfavorable for another. For example, the aging population creates a greater need for healthcare real estate, while working online has a negative impact on the sale of business properties. By spreading the risks, you can offset the loss from one investment with gains from another.

How can I invest in different types of real estate?

The most straightforward and approachable way to invest in real estate is to do business with a real estate fund. In this way, you don’t have to bear the burden of being a property owner yourself, but you do benefit from annual payments of returns. Investing through a real estate fund takes away certain risks. Think for example of the vacancy risk or the interest rate risk that property owners face.

However, it is also possible to build your own real estate portfolio. If you do this, it is advisable to work with a real estate developer or real estate agent. By sharing your vision with these experts, it is possible to turn an idea into concrete reality, while complying with all prevailing laws and regulations. The goal of development or investment in real estate is to sell properties at a profit or rent them out for a certain period of time. The more different types of real estate you rent or sell, the greater the chance of a profitable portfolio. 

To build a profitable real estate portfolio, you need a partner that will provide accurate information and is set on providing you with the best possible service. Are you looking for help with financing real estate or realizing a real estate project to expand your real estate portfolio? Contact us now for more information.


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