Investing in multifamily housing and office buildings helps private investors build a portfolio that weathers risk better and builds wealth — and individual investors are wise to consider this two-pronged approach. Real estate is a hedge against volatile stocks and bonds, a way to build wealth as property values rise that is also very tax efficient.
But diversification is just as important in a real estate portfolio. Each property type performs differently based on market conditions, and investors can’t assume that one will always be a great investment because it has performed well in the past. Instead, a better real estate investment strategy is to build a portfolio that combines different types of income-producing properties.
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