3 Ways to Diversity Your Real Estate Investing Portfolio


Every discussion involving real estate investing usually centers around the concept of diversification.

It is universally accepted as the golden rule of real estate investing, and the best way to protect against fluctuation.  Diversifying your portfolio in the stock market protects investors in case one sector, or type of investment fails.  Real estate has historically provided a more stable ROI than other types of investments, due to it being a tangible asset that certainly allows one to diversify their portfolio, but it was not practical to diversify your real estate portfolio until recently.

EquityHunt, a new website that connects real estate developers with investors offers 3 ways you can diversify your real estate portfolio:

1. Geographic Region

Every part of the world has unique characteristics that impact the marketplace in terms of real estate investments.  By diversifying in different parts of the United States and beyond, you won’t be overly succumbed by sudden dramatic shifts in geographic pockets.

2.  Sponsor

Conducting business with different sponsors & developers is another great way to diversify your real estate investing portfolio.  As a real estate investor, you should make a concerted effort to obtain information from as many sources as possible.  Different people may specialize in certain markets, or types of properties, so it would be unwise to always do business with the same person.

3.  Type of Property

A third way you can diversify your real estate investing portfolio is by investing in different types of properties.  Just like you wouldn’t want to only invest in one industry specific stock category, you don’t want to only invest in one type of real estate property.  By spreading your investments amongst different property types (ex. hotels, land, retail, industrial, etc.) you protect yourself from losses in one property category.

Diversifying your real estate portfolio can be difficult if you can’t travel, and don’t have the professional network necessary to find and make deals with interested sponsors.  EquityHunt.com feels as though they have solved this problem with their virtual meeting place concept for real estate professionals, “It would be extremely difficult for someone in New York City to make wise real estate investments in Los Angeles and Miami without dedicating a ton of time and money for travel,” said Steven Czyrny, Marketing Director.

Read more at PersonalRealEstateInvestorMag.com

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