Attention ladies interested in real estate investing! Investing in real estate can be simpler than you might believe.

While stocks and bonds are common investment avenues, real estate investing offers a fantastic way to diversify your portfolio and increase your returns. Sadly, many women steer clear of this opportunity, worrying they might quickly lose their initial investment.

This hesitation is understandable. Women aren't heavily investing in general, so why would they opt for real estate? According to a recent S&P Global survey, only 26% of women in the U.S. are investing in stocks and bonds. This means that more than 75% of women are absent from the investing landscape, particularly in real estate.

Nonetheless, real estate can be a smart way to diversify investments, generate income, and enhance returns. This is especially crucial during periods of market volatility, like those seen during the COVID-19 pandemic. “Real estate doesn’t correlate with stocks,” notes Carol Fabbri, a CFP and Principal at Fair Advisors. “Diversification is key to minimizing volatility in your portfolio.”

Whether you prefer a hands-on approach or a more passive investment, there are straightforward methods to engage in real estate.

Real Estate Investment Trusts Offer Hands-Free Options

If you're a woman seeking real estate exposure without the commitment of owning physical properties, consider real estate investment trusts (REITs). These publicly traded companies focus on income-generating real estate or buy residential and commercial mortgages.

Trading like stocks, REITs must distribute 90% of their earnings to shareholders as dividends, making them appealing for income-focused investors. You can buy REITs through mutual funds or exchange-traded funds.

REITs cover various real estate sectors, including office spaces, apartments, warehouses, shopping centers, cell towers, hotels, and mortgages. Some REITs specialize in a specific sector, while others diversify across multiple property types.

Most REITs are publicly traded equity REITs, but there are also mREITs that invest in a pool of mortgages and private REITs that aren’t publicly traded. Currently, there are over 225 publicly traded REITs in the U.S. This variety provides numerous options for all types of investors. “It’s a more diverse way of gaining real exposure than just buying a house on your street,” adds Molly Ward, a Financial Advisor at Equitable Advisors.

Maximize Returns with Low-Cost ETFs

If you're new to REITs, consider starting with REIT ETFs. These are perfect for investors lacking specific real estate knowledge, typically featuring lower fees and investing across various market segments, according to Fabbri from Fair Advisors. Even if you want a specific real estate mix, ETFs can help. “You can tailor your investments across different areas, diversifying within the asset class,” she explains. Currently, there are over 20 publicly traded REIT ETFs.

Another passive way to invest in real estate is to buy shares in companies with substantial real estate portfolios. Although these may not be their primary revenue sources, they offer access to tangible assets with lower risks. Companies like Starbucks and Exxon Mobil have extensive real estate holdings.

Expand Beyond Just Your Home

For many women, their home is their most significant asset, but it shouldn't be their only real estate investment. Many hesitate to invest in physical properties, thinking they lack the cash, expertise, or time to be landlords or renovate properties. They assume owning a home suffices.

However, acquiring an investment property is feasible with the right knowledge and commitment. Sure, upfront funds are necessary, but with determination, the rest can fall into place.

“Women must gain confidence in real estate. It’s not overly complicated. There’s a lot to learn, and it takes work, but the rewards can be substantial,” emphasizes Quinn Palomino, co-founder, and Principal of Virtua Partners, a global private equity firm focused on single-family rentals and hotels. “Some feel intimidated by real estate; my advice? Don’t be.”

Renting vs. Owning: What’s Your Investment Goal?

Before you embark on searching for a property, clarify what you want from the investment. If your aim is to generate rental income, your approach will differ from seeking a property to renovate and flip. Each path presents unique challenges to consider.

Starting with rentals, Ward from Equitable Advisors warns that investors anticipating consistent monthly income must be prepared for unforeseen circumstances. There may be months when the property is vacant or unexpected repairs drain your savings. On the flip side, buying a property to renovate carries its own risks, including overpaying or misestimating repair costs or market demand.

Regardless of your choice, Palomino advises starting small and learning from your experiences. She recommends purchasing a residential property as a starting point and progressing from there. “I’ve seen too many individuals tackle projects that were too ambitious and get overwhelmed. Traditionally, investors begin by buying and fixing houses. It’s an excellent way to start,” she notes. Despite the pandemic, some residential markets show strong demand.

For women contemplating real estate investment, uncertainties can lead to hesitation. However, with parts of the market thriving and diversification being vital for long-term success, this is one asset class that deserves attention.