How to invest in real estate is a form of consumption

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How to invest in real estate is a form of consumption

People like to stick with what they know, home may be your most valuable asset, but that does not mean it is your best investment, according to CNBC commentator and co-editor of the new book How I Invest My Money.

And the equity in your home can be misleading; it's really a form of consumption.

You own the home rather than paying rent for a home that you do n't own, but you have to live somewhere, said Brown.

You should consider your home as an emotional investment. According to Brown, you spend money on it.

Once you start doing the math on property building, you will find that decades of inflation, repairs and renovations leave you with an asset that underperformed the market, Brown said. Investing in more property can make these returns worse.

That does n't mean that real estate ca n't be part of your portfolio.

To capitalize on property ownership, Brown invests in Real Estate Investment Trusts or REITs.

REITs allow investors to own shares in a publicly traded company that owns income producing properties. Check out this video to learn more about the REITs that Josh Brown invests in and to hear more about the wealth advisor ’ s philosophy on real estate.

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Disclosure: Acorns and Comcast Ventures are investors in NBCUniversal and Comcast Ventures.

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