It's no secret that stocks have been in a slump for much of 2022. And while they rallied briefly this week, many investors are still looking at on-screen losses in their portfolios compared to the numbers they enjoyed at the end of 2021.
If the recent stock market correction has been getting you down, it may be time to branch out into the world of real estate. Doing so could open the door to new moneymaking opportunities -- and just as importantly, give you more diversity in your portfolio on a whole.
The upside of getting into real estate right now
Investing in real estate can be risky. But if you're familiar with the stock market, risk may be something you're already used to and comfortable with -- so why not take that approach with a new type of asset?
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Now when it comes to putting money into real estate, you have a few choices. One option is to purchase an income property that you rent out on a short- or long-term basis.
Right now, there's a lot of demand for long-term rentals. And the short-term rental market is hot as well. Many travelers would still prefer a private home of their own while away than to stay at a hotel and have to deal with cramped rooms and shared common areas. Either way, you could do quite well for yourself by buying an income property.
Of course, doing so isn't the easiest thing right now. Home prices are quite inflated compared to pre-pandemic levels, and inventory is still very low. But if you team up with the right real estate agent, you might manage to find a property at a price point that makes sense.
Furthermore, while mortgage rates have climbed over the past number of weeks, they're still pretty competitive, historically speaking. So it's not necessarily a bad time to finance a home. And if you have a large amount of cash sitting around, you could always look at buying an income property outright if doing so is something you're comfortable with.
Now if you don't want to take on the risks of owning a rental property, you can get into real estate another way -- by purchasing REITs, or real estate investment trusts. REITs are companies that make money through real estate holdings. Industrial REITs, for example, operate warehousing space.
Not all REITs trade publicly, but many do. If you're used to buying and selling stocks, you're already equipped to buy REITs. And while publicly traded REITs can follow a similar pattern to that of the broader stock market, that doesn't always happen. So while we may see stock values remain unstable in the coming weeks, REITs might do a better job of holding their value.
Shake things up a bit
Sometimes, when stock values get stuck in a sluggish pattern, it's important to shake things up. And investing in real estate could be your ticket to doing just that.
It pays to look at buying an income property or putting some money into REITs -- especially if you like generous dividends, which REITs are known for. The mere act of branching out could change your mindset -- and give you something to look forward to during these otherwise tricky times.
