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Which Real Estate Are You Looking to Get Started Investing In?

by GBAF mag
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Which of the many asset classes should you focus on first, as you begin building your investment portfolio? The answer is pretty straightforward- stocks! While that advice seems simple enough, the next challenge comes when determining what type of income-generating assets to own. Too many investors rarely venture beyond traditional bonds and stocks when making an investment portfolio, leaving themselves vulnerable to losses.

If you are new to investing or have been exposed to only low-risk investments, you may be missing out on the opportunity to build a foundation of assets that will generate both income and growth. You may be overlooking the most important asset class of all-yourself! While it may not seem intuitive, stocks and bonds are some of the safest and most reliable income producing assets available-so long as you understand how to time the markets to maximize returns.

The best stocks for the new investor are those that pay high dividends (at least 20%) during each year of ownership. Dividends are both a dividend payment you receive from the stock price and the additional money the company invests in operations and expansion. Dividends are also a tax benefit that saves you money on taxes and is a great incentive to investors who may be wary of putting their eggs in one basket. Stocks with low historical returns but good annual dividends are the best long-term investment. Investors who purchase a good, low risk, but potentially lucrative stocks will more than offset their risks by enjoying significant gains over time.

Real estate investing offers similar benefits. Investors can purchase property “on the market” and expect rental income for years to come. Some real estate assets are tied to appreciating homes-in a decreasing housing market, for example. Other real estate assets can yield very high returns-as much as 30%.

Most long term and stable investments are easy to obtain and relatively inexpensive to manage. Some examples include fixed income investments such as bonds, CDs, and savings accounts. Many people choose to build a portfolio of low cost, income generating assets that will produce a monthly income. These types of assets make it easy to diversify across asset classes and to use any income from these assets for debt payments and home expenses.

Most people begin their asset portfolio in the most basic asset classes: cash, stocks, and bond funds. But there are other types of investments that are considered the best income-generating assets. When considering an asset class, consider the potential return and consider the management fees attached to the asset class. Diversification across asset classes-particularly in a highly volatile market-is a key part of building a sound portfolio. You want to minimize your risk of loss by spreading your risk over a larger number of investment products. And, with a large number of options, you can easily select the best income-generating assets.

Real estate is one area in which many people are attracted to investments because of the potential to generate income. The cost of buying and developing a piece of property can be very expensive. There are also many potential tax benefits, although these depend on the particular type of property you are interested in. One type of real estate that many investors like to invest in is rental properties. Properties that generate income can be rented out to tenants to generate extra income.

The types of investments that some investors choose to pursue are not just the best income generating assets; they can also be very safe ways to get started investing. Some of these options include stocks and bonds, commercial real estate, and raw land or undeveloped land. To learn more about getting started investing and ways to choose the best assets to invest in, look online.

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