Real estate as an investment can be a way to diversify a portfolio and potentially serve as a hedge against inflation. Returns typically are derived from capital gains, tax credits, and/or rental and lease income.
There are many ways to invest in real estate. Direct investment typically involves the purchase, improvement, and/or rental of land or buildings. Indirect investment typically involves the purchase of shares in an entity that invests in real estate, such as real estate investment trusts (REITs), mutual funds and exchange-traded funds that invest in real-estate related stocks and/or REITs, and real estate limited partnerships.