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The investment in real estate has been a well-known strategy for creating wealth. It offers many benefits in terms of diversification, tax breaks, and equity building as well as competitive returns that are risk-adjusted. However, it has its own drawbacks like illiquidity, as well as high capital requirements. If you’re considering adding real estate to a portfolio, it is important to think about your investment goals as well as your level of knowledge, and your level of risk tolerance.

Real property investing can be either hands-on or hands-off, depending on the kind of property you pick and the management style you choose. For example rental properties tend to be among the most hands-on real property investments due to the ongoing maintenance and vacancy costs. They also provide a regular income stream and have the potential to increase in value over time.

Another option is to purchase commercial properties such as shopping malls, hotels or office buildings. This type of investment can ensure a steady flow of cash and increase rents, as well as an insurance against inflation. However, it is more difficult to manage than residential real estate and often involves higher initial investments.

Another alternative is to invest in raw land which could generate an ongoing stream of income through leasing the land for the construction of homes or businesses. This can be an approach that is hands-off, but it could pose some risks as well, including the requirement for development fees and the possibility of environmental issues that could impact the value of the property.

Finally, you can invest in a real estate investment trust (REIT), which is similar to a mutual fund, but with a focus on a specific property portfolio. REITs tend to be less hands-on and require lower upfront investments than investing in physical property however, they don’t have the same flexibility or liquidity as direct real estate investments.