Any investment has risks, but an REIG is a real estate company that manages assets on behalf of a large number of investors and one of the main advantages of an REIG is that it is a flexible investment that can be sold at any time. There is no minimum investment period required, and you can make a profit with a small initial investment.
Like any financial investment, investing in an REIG involves risks (total or partial loss, liquidity, rental, etc.) but these can be reduced by diversification.
Diversification can be achieved in several ways:
This is a strategy that consists of investing in different types of REIGs.
For example, an owner may invest in both residential and commercial REITs.
Another way to achieve diversification is to invest in funds that focus on different geographic regions or promising sectors where demand is higher, such as offices or logistics.
The most advanced form of investment diversification is to invest in multiple assets in the same industry and region but with distinct characteristics such as location, size, owner, tenant and asset use.
This type of financial diversification reduces exposure to asset-specific risk factors for less overall risk exposure.