NPR's Uri Berliner is taking $5,000 of his own savings and putting it to work. Though he's no financial whiz or guru, he's exploring different types of investments — alternatives that may fare better than staying in a savings account that's not keeping up with inflation.
Reckless bets on real estate can cause trouble. They can, for example, help to bring down the global economy. But many financial advisers say including some real estate in an investment or retirement portfolio is a good idea. It adds diversification.
And real estate prices are rising. Here's one way to tell: The house-flipping shows are back on cable. Buy, remodel, sell, repeat. We've been there before, and it didn't end happily. And yet prices fell so hard during the crash — 50 percent or more in some parts of the country — that a rebound just makes sense. Real estate watchers are divided on whether fundamentals justify further price increases or whether the market is getting too frothy again.
Josh Dorkin runs a real estate investment website called Bigger Pockets. I asked him what kind of real estate bet I can make for $1,000. His advice: Be careful.
"We're kind of in a bubble once again," he says. "We've got these low interest rates; we've got the big money funds coming into the market. And of course if you're savvy and know what you're doing, there's always going to be an opportunity."
Dorkin runs me through my options.
"You could go and flip a house. Of course, you'd need to go out and take out a high-risk loan more likely than not to do that and of course doing that is really kind of like running a job in itself."
Range of REITs
Curious about some of Uri's other REIT holdings?
Storage units: When the housing market picks up, people move more often. They need someplace to stash their stuff for a while. They want more space, and they rent it from storage unit companies that are REITs.
Data centers: Data centers are like unfurnished apartments for digital information. They're secure and climate controlled with plenty of reliable power. With more companies using the cloud, demand for these digital apartments is growing.