Real estate investment involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. Real estate is an asset form with limited liquidity relative to other investments (such as stocks or bonds that openly trade on financial markets).
It is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment.
Investment and Asset management
remains a critical consideration as
pension funds investments seek to leverage
their natural liquidity in order to generate higher returns from longer term
investment
in new capital assets. The traditional approach of allocating to existing
securities
markets – which may only result in increasingly inflated prices for existing capital –
is increasingly being called into question.