Real estate is one of the oldest wealth-building strategies. Here is how to invest, from REITs to rental properties.
REITs: Real Estate Without Hassle
Invest in property through the stock market.
REITs own and manage property portfolios. No management, instant diversification, high liquidity, must distribute 90% of income. EU options include iShares Property Yield UCITS ETF yielding 3-4%.
Buying Rental Property
Fundamentals of direct property investment.
Key metrics: Gross yield aim 5%+, net yield 3-4%+. Factor mortgage, tax, insurance, maintenance at 1-2% annually, vacancy at 1 month per year, management at 8-12% of rent. Location is everything.
Real Estate Crowdfunding
Fractional investment for smaller budgets.
Platforms like EstateGuru allow investments from 50 euros. Debt type targets 8-12% returns. Equity type offers variable returns plus appreciation. Risks include illiquidity and platform risk.