An alternative investment is a type of investment that falls outside the conventional categories of cash, bonds, or stocks. These are typically used as a means to diversify an investment portfolio and can include assets such as:
- Real Estate: This can refer to investments in residential, commercial, or industrial properties. Investment methods can vary from direct ownership to real estate investment trusts (REITs).
- Infrastructure: This encompasses investments in large-scale public systems, services, and facilities. It can include utilities, transportation, telecommunications, and energy.
- Land Investments: This involves purchasing and holding land in its raw, undeveloped state, or investing in agriculture or timberland.
- Real Estate Debt: This includes investing in the mortgages and loans used to purchase real estate. These loans are typically bundled into a mortgage-backed security that investors can purchase.
In addition to these, there are numerous other alternative investment options in real estate, like student housing, senior living facilities, storage units, and parking structures. These alternative investments can provide significant returns, but they also carry their own unique risks and should be thoroughly researched before committing any capital.
It’s important to note that the success of an alternative investment in real estate often depends on a variety of factors such as location, market conditions, and the investor’s knowledge of the real estate industry.