Investments come in all shapes and sizes. The investors who see the most profit, boast a diversified, and intelligently put-together portfolio. In this post, we will explain exactly why you should diversify and what you can do to get started!
Why Should I Diversify?
When you diversify your portfolio, real estate or otherwise, you are aiming to lower your risk, while maximizing your return. Investors will agree that a diversified portfolio will yield the results you are after faster, and with the least amount of risk. You should have a plan in place and specific goals in mind. As the market changes, so should your strategy. It is important to be flexible so your investments can change as the market does.
What Should I Invest In?
- Rental Properties – Owning rental property—whether it’s a duplex, fourplex, or a single-family home—can provide stable long-term income and strong appreciation in growing neighborhoods. In Milwaukee, neighborhoods like Bay View or Riverwest are increasingly popular with renters, especially young professionals and students. Many first-time investors take advantage of FHA or VA loans to “house hack”—purchasing a 2–4 unit building, living in one unit, and renting out the others to cover the mortgage.
Before jumping in, it’s important to understand landlord-tenant laws in Wisconsin and local occupancy regulations. You’ll want to estimate not just the mortgage, but also property taxes, insurance, vacancy rates, maintenance costs, and reserves. Sites like Rentometer or the Milwaukee Department of Neighborhood Services can help you validate rental income and compliance requirements. If you’re unsure about tenant screening or maintenance, working with a property manager—especially in your first year—can help you avoid common pitfalls. - Fix and Flip Properties – House flipping can be profitable in the Milwaukee market—but it isn’t as easy as it looks on TV. Successful flippers often have deep knowledge of both real estate markets and renovation costs. In fact, some of the best local flippers I’ve worked with in Milwaukee started as general contractors or partnered with them to avoid cost overruns and permitting delays.
If you’re considering a flip, make sure to account for all soft costs—closing costs, holding costs, utilities, and 10–15% for unexpected repairs. It’s also essential to understand city inspection timelines and permitting rules from the Milwaukee Development Center. In today’s market, competitive flipping often requires buying off-market deals or distressed properties that need full rehabs—so tools like PropStream, DealMachine, or attending Milwaukee sheriff sales may be key. Always build a buffer into your renovation budget, and consult a real estate attorney before purchasing distressed properties to avoid title issues or liens. - Commercial Properties – Commercial property investment is often over-looked by new investors. It can be a great niche with low vacancy rates if you are in the right location. There are also great tax breaks that come along with commercial property investment. There is less competition and a great opportunity for continual cash flow.
- REIT’s – Or a “Real Estate Investment Trust,” is similar to a mutual fund, except the trust invests in real estate. They purchase both commercial and residential properties. This is a great option for an investor looking to diversify in more of a hands-off investment.
- Vacation Rental – Platforms like Air BnB and Vrbo have opened the door for short-term rental income, but it’s not entirely passive. In Milwaukee, certain neighborhoods like the Third Ward or Walker’s Point are hotspots for travelers—but the city has specific rules around short-term rentals. You must register as a tourist rooming house and obtain a license through the City of Milwaukee. Failing to do so can result in fines or legal issues.
Before diving in, factor in turnover costs, cleaning, property taxes, and platform fees. You’ll also want to compare your expected Airbnb income against long-term rental rates. Tools like AirDNA can help you analyze local short-term rental performance data. Short-term rentals can work especially well in Milwaukee during peak travel months—like during Summerfest or Brewers games—but success depends heavily on your location, property presentation, and guest management. If you’re hands-off, consider hiring a co-host or property management service specializing in vacation rentals. - Niche Real Estate – This includes things like trailer parks, storage units, and land (often leased for recreation, parking, etc.) These niche investments offer low competition and high returns.
What Else Should I Know?
- Try to own in different parts of the state or even the country. This way you won’t have to deal with all your property succumbing to geographical market shifts.
- Crowdfunding services can help to connect developers and investors. These services are typically for people with higer incomes.
How Do I Start?
Start planning right away. Think ahead and set your goals. What are you trying to achieve with your portfolio? Consider up-and-coming areas and do your research! Follow your market trends and keep yourself abreast of major real estate transactions in your area. Look into future zoning and connect with professionals who can assist you in finding off-market deals.