Real estate investing has been a long-standing wealth-creation strategy. It provides many benefits such as diversification, tax breaks and equity building and competitive returns that are risk-adjusted. However, it also has certain drawbacks, such as illiquidity and high capital requirements. So, if you’re considering adding real estate to your portfolio you should consider your investment goals, your level of knowledge and risk tolerance.

Real estate investing can be hands-on or hands off, depending on the kind of property you pick and the management style you choose. Rental properties, for instance, tend to be real estate investing the most hands-on investments in real estate because they require ongoing maintenance costs and vacancy costs. However, they also provide an ongoing stream of income and have the potential to appreciate over time.

Another alternative is to invest in commercial property, such as office buildings, shopping malls or hotels. This type of investment will provide a stable cash flow and increase rents, as well as an insurance against inflation. However, it is more difficult to manage than residential real estate and typically involves higher initial investments.

Another option is to invest in land that is raw that can provide a steady stream of income by leasing the land for the construction of homes or businesses. This can be an option to be hands-off, however it comes with some risks too, such as the requirement for development charges and the potential for environmental issues that may affect the value of the property.

You can also invest in REITs, which are a kind of mutual fund that focuses on a particular property portfolio. REITs are less labor-intensive and are more affordable than physical property investments, but do not offer the same flexibility and liquidity.