Real estate stocks are some of the most heavily scrutinized in the stock market today. If you look at the last 12 years, the real estate industry has dramatically changed. The financial crisis back in 2008 initially stemmed from the sub-prime mortgage market collapse.
In many cases, this was both good and obviously bad for the market. The bad, we know, but the good part is that the crisis changed the way real estate transactions are conducted while also offering new guidance on how to grow after the crisis was remedied.
Why Real Estate Stocks?
As far as real estate stocks are concerned, you have your pick. Companies within the sector include residential, commercial, and industrial real estate. These properties are typically held in a basket of other properties known as REITs. REITs or “Real Estate Investment Trusts” are vehicles that allow individual investors to buy shares in real estate portfolios. These investors then receive dividend income from the revenue generated from the portfolio.
While some REITs will focus on traditional housing developments or commercial portfolios, other REITs target specific niches. For instance, with the rising popularity of marijuana stocks, there are real estate investment trusts that build a portfolio of commercial properties that house grow operations.
Similarly, there are other unique REITs that address a number of other growing niches. The novelty of such portfolios allows investors to gain exposure to different pieces of the market without having to shell out big money to purchase hard assets.
Best Stocks For Inflation In 2021? 4 Real Estate Stocks To Watch
Real estate stocks not only offer diversification to your portfolio, but are also a strong inflation hedge.