If you wish to be a real estate investor, the experts from the industry believe that you should have a hybrid strategy. What exactly is a hybrid real estate investment strategy? You will find out as you continue to read. The first thing that you have to know is that real estate investment gurus like Lior Babazara believe new investors should not limit to a particular type of real estate investment.
Lior Babazara Explains the Hybrid Strategy
“The term hybrid doesn’t mean that you should invest in different types of properties only. It means a lot of things in the same strategy. For example, you should have investments in residential as well as commercial properties. Moreover, you should invest in equities as well as debt ownerships,” says Lior Babazara while explaining the concept of hybrid strategy.
You can’t ignore the fact that it is much easier for you to have this kind of strategy today than it was in the past. Let’s take a look at some of the reasons Lior Babazara gives in favor of a hybrid investment strategy as a real estate investor.
The Opportunities Are Unlimited
The first thing you have to know is that you have unlimited opportunities of investing many types of real estate projects. Think about online crowdfunding websites that give you access to different types of project developers. They have project developers who own and manage their own properties, and project developers who buy real estate debt securities. By joining an online crowdfunding website for real estate investors, you can add all of these real estate properties to your portfolio.
The best thing is that you don’t have to do anything. The companies that own these properties and debt securities are managing everything for you. They just need your funds to expand their business, buy new securities, and own more properties.
Improves Your Income Generation
One of the things you have to know about owning real estate properties is that you have to spend on their maintenance. You also have to prepare tax and other types of documents. In addition to that, you have pay mortgage and other costs of maintaining the property. As a result, what you get in your pocket at the end of the year is not a very huge amount. Yes, you can make a huge amount if you own a lot of properties or if you have rented out multiple units.
Lior Babazara believes that by investing in different types of properties, you can increase your income. You will find the chance to invest in companies that are buying properties and managing on their own. You just have to be concerned with the dividends you are getting at the end of the month or quarterly. Investing multiple types of properties also gives you a good indication of your strengths so you can focus on them and make money from a method you are good at.
Diversify Your Portfolio
Is this something that needs emphasis? Lior Babazara continues to stress on the fact that real estate investors have to diversify their investment portfolios. According to him, he sees too many investors in this industry who don’t take diversification seriously and rather rely on only one type of investment. Through diversification, you can distribute your risks and thus minimize your losses. At the same time, the combined income from a diversified portfolio is quite reliable because you can never be thrown out of the market by a single slump. In every way, it makes sense for you to have a hybrid investment strategy today.
It is okay if you are thinking about a particular type of investment when you are investing for the first time. However, your aim should always be to have a hybrid strategy because it is flexible and lets you adjust to the changing market conditions without incurring a loss that you can’t bear and which throws you out of your investment career.