Real Estate Investment Trust
Market risk may affect all investments in an asset class in a similar manner, such as in the event of a market-wide price crash. As such, market risk that cannot easily be mitigated through diversification. While buying properties in different states might diversify market risk to a partial extent, if the wider property market crashes, diversification is unlikely to assuage the systematic risk successfully.
Property investors should additionally invest in other asset classes that tend to move in a non-correlated manner to real estate. Property investors can also focus upon a longer investment time horizon which allows correcting markets greater opportunity to recover.