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Low Risk Real Estate Investing: How to Build Wealth Safely

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Learn how to invest in real estate without taking on too much risk.

description: a photo of a small, well-maintained single-family home with a "for sale" sign in the front yard. the home has a white picket fence and a small garden in front. the image suggests the idea of starting small with real estate investments and gradually building your portfolio.

Investing in real estate has been a tried-and-true method of building wealth for centuries. However, many people are hesitant to invest in real estate because of the perceived risk involved. While investing in real estate can be risk, there are ways to minimize that risk and build wealth safely.

According to financial advisor Dave Wieland, the key to successful real estate investing is to buy and hold. "Buy real estate, hold it for a long time, and maximize the tax benefits," Wieland says about creating wealth. By holding onto your real estate investments for the long term, you can weather market fluctuations and see significant returns over time.

One way to invest in real estate without taking on too much risk is to invest in real estate investment trust (NASDAQ:REIT) companies. REITs are corporations that manage portfolios of high-value real estate properties and mortgages. By investing in a REIT, you can diversify your real estate holdings and reduce your risk.

Another way to reduce risk when investing in real estate is to start small. One million dollars might not be the fortune it once was, but it's still plenty of money. Instead of trying to buy a massive commercial property, consider starting with a single-family home or small multi-unit building. This will allow you to learn the ropes of real estate investing without taking on too much risk.

REITs offer a lower-cost option for investing in real estate and diversifying your portfolio. Learn about how REIT ETFs work and which ones might be right for you. By investing in a REIT ETF, you can gain exposure to a broad range of real estate assets without having to buy individual properties.

If you're investing for retirement, you want to be careful to protect that hard-earned nest egg. Here are six lower-risk options to consider in your retirement portfolio: high-yield savings accounts, certificates of deposit (CDs), money market funds, government bonds, corporate bonds, and dividend-paying stocks. By diversifying your portfolio with these lower-risk options, you can protect your retirement savings from market fluctuations.

When it comes to real estate investing, the first property is often the hardest to acquire. However, once you've acquired your first property, the second one becomes much easier. According to real estate investor Dan Lane, "That first one is really the hardest, but once you get one the second one is so much easier." By starting small and building your portfolio gradually, you can minimize your risk and build wealth over time.

Finally, it's important to remember that there are ways to put your money to work for you without buying stocks. Real estate investing is just one of many options available to investors. By exploring different investment options and diversifying your portfolio, you can build wealth safely and securely.

real estate investinglow riskbuilding wealthreitsportfoliosdiversificationretirement investingfirst propertygradual portfolio buildingminimizing riskinvestment optionsdiversifying portfolioNASDAQ:REIT
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