The real estate sector offers Rhode Island investors a variety of opportunities to diversify their portfolios. For instance, you could purchase a multifamily home, an empty plot of land or an office building. Alternatively, you could invest in a real estate investment trust (REIT), which is akin to a mutual fund focusing solely on this sector.
What to consider when investing in real estate
There are a couple of variables that you’ll need to account for when deciding how to invest in real estate. First, you’ll need to decide whether you want to have direct or indirect control over the property that you acquire. Buying a home or plot of land in your name means that you are responsible for its maintenance and upkeep. However, investing in a REIT means that you are helping other parties acquire a home, office building or land. You’ll also need to consider your timeline and risk tolerance when choosing an investment vehicle that best suits your needs.
Your investments might impact your estate plan
One of the benefits of owning a home, land or shares in a REIT is that they can often be passed down to future generations. This may allow you to secure a brighter financial future for your children or grandchildren. However, to do so, you’ll likely want to mention these assets in your will or include them in a trust.
Although investing in real estate may bolster your overall portfolio, it also comes with many risks. Therefore, it’s important to do extensive research into a potential investment opportunity before moving forward with it.