Should you invest in real estate funds? The short answer is yes, but make sure you understand what you're investing in. Here are four tips to help!
Full Transcript:
Hello, welcome to Arista Advice. Question of the week is: "Paul, should I invest in real estate funds?" Real estate has become a popular way to invest hard-earned money, and the short answer is yes, but make sure you understand what you're investing in.
Let me propose to you four questions for you to take in consideration before investing in real estate.
Number one: it provides great diversification. Real estate is is a non-correlated asset to non-traditional assets.
Number two: it protects and can protect against inflation. Historically, going back to 1927, real estate has been a reliable hedge against inflation.
Number three: by purchasing a REIT, or a Real Estate Investment Trust, versus buying into a piece of dirt down the street, is the REIT provides you liquidity where the dirt may not.
Number four: it can provide dividend income and price appreciation. Last year in 2021, REITs did very well. They were one of the top three asset classes that did really well. Real estate is a good piece of the pie that asset should go into for diversification.
It's also very important to remember the specifics before investing in real estate investments. I have heard many, many stories for many years of many people that got into real estate investments and lost all of their money. Just this week, heard of a couple where they put money into an investment and the money disappeared. They bought into an investor contractor who took their money. Be very, very careful with investing in real estate. It can be a very good investment, but there's a lot of don'ts and warnings when it comes to real estate investment.
Make sure you talk with your financial advisor and other credentialed professionals before ever investing, and remember, go to AristaWealth.com to get other videos, tools, tips and resources to help you live a life of significance, and don't forget to subscribe, rate, and review.