Like all investments, real estate investment is full of risk. The variables are many, the can't-miss propositions few. Where should the savvy money go? How does real estate fit into your overall portfolio?

Here are eight tips:

1. Know your market well. If you pay market price for an investment property, you probably won't see particularly robust returns. Look instead for deals that are underpriced for one reason or another.
2. Turnkey properties can unlock returns. Turnkey properties are fully vetted redevelopment properties with tenants and a property manager. They are sometimes touted as good for beginner investors, but compared to other tenant properties, they are not quite as lucrative and are a bit more expensive.
3. Don't bother with vacation homes. Vacation homes have been called nothing more than retreats with a low-tier income option. Real estate experts concede that, seasonally, they can generate decent returns, but the vacancy and holding costs coupled with premium pricing tend to equate to less-than-stellar returns.
4. Give REITs a chance. A real estate investment trust, or REIT, is a company that owns, develops and redevelops real estate assets. Publicly traded REITs and REIT funds offer liquidity, low investment minimums and diversity. Be aware that performance tends to align with stock market return and may not correlate with actual property values. We recommend a 15% cap on real estate exposure in a portfolio.
5. Be wary of rental properties. You can make money with rental properties, but if you have little experience in the game, expect a steep learning curve. Brick-and-mortar properties require expertise and management — you will probably need to hire someone to handle the leasing and day-to-day operations, which will cost 4%-8% of gross rents.
6. Flipping for flipping houses?The goal with house flipping is to get in short-term and sell properties at a markup. Many investors make money this way, but much depends on the neighborhood and the hidden costs associated with renovating property that can decrease its net return. There's plenty of risk here.
7. Vacant property is a mixed lot. Vacant properties may hold tremendous potential in a neighborhood that's gentrifying, or if the land sits in the path of a proposed water or sewage line, but investors can pay on the buying and selling ends. As a development play, these properties have a huge one-time upside, but the capital gains tend to be a hindrance.
8. Increase your profit potential with an investment of time. Property development, management and administration can require an army of specialists, but if you're adept at repairs, accounting and showing a vacancy to prospective renters, you can the forgo the fees associated with hired help. This may be a tradeoff worth making.

Should you decide that this is the investment for you, vet your renters or owners very thoroughly and check on them frequently. Real estate has curb appeal that other financial assets can't match. For many investors, the tangible nature of real estate offers more peace of mind than the intangible nature of stocks and bonds. Real estate pricing also offers peace of mind to investors, as pricing seems more stable because it isn't updated daily by the media. So weigh the long-term return potential of real estate with other assets before you add properties to your portfolio.