For rental property owners, buying a home typically means taking care of it, managing tenants, and navigating local market conditions. For many, it also means putting all of your money into one structure, and that’s risky.
Without doubt, diversification is a critical component of every financial investment. When all of your money is in a single property, one misfortune could nearly wipe out your investment. A flood can cause significant long-term damage. A commercial contractor opens up a factory across the street, tanking your property’s value.
With passive income in real estate, it’s possible to reduce risk. Ark7 supports this process in several ways.
Putting Your Money to Work
One of those benefits is the ability to put your money into more than one property. While you can invest in a single Ark7 property and watch it grow, you can also put smaller amounts into several properties. They may be located across significant geographic regions. That lessens the blow if one area suffers a concern.
Invest in Various Types of Real Estate
As we’ve seen in recent years, the real estate market can undergo substantial changes. Because of the high cost of homes and mortgages, rental properties are key to the success of many investment strategies. Moving more of your money into rental markets could benefit your portfolio.
As the travel industry heats up, you may notice more demand for short-term rentals growing. With Ark7, you can build your real estate portfolio to incorporate more of these properties, allowing you to take advantage of changing conditions.
One strategy is to invest in single-family homes. Another is to invest in multi-family properties. A third is to use condos as rental properties.
For others, buying a foreclosure, fixing it up, and selling could still be desirable. It certainly means that you have more risk. It also means there is more responsibility. For those who want a passive real estate investment portfolio, foreclosure investing isn’t ideal. However, investing in new property development in key areas of the country is an opportunity for expansive growth.
What to Consider When Diversifying Real Estate Investments
Diversification in passive real estate presents an opportunity for many people to add real estate to their existing investment portfolios, or you can start your wealth-building career with Ark7. There are several factors to consider:
- Invest comfortably. Diversification allows you to put smaller amounts of money into various investment strategies or properties. Consider how much diversification is best for your needs.
- Speak to your financial advisor. Risk tolerance is always a significant factor when it comes to diversifying, and your age is just one component of that investment decision.
- Learn about passive investment. Diversification with passive investing spreads the risk even further and could mean more time for you instead of dealing with the tenants.
Learn more about how Ark7 creates an opportunity for investors to move their strategy forward with diversification as a priority.
