So the question is, is the gymnastics of owning the property worth 2% to you, if you are just looking for diversification and don't really care beyond that? 

If an individual is looking to be a part time arm chair investor with only a few investments for retirement, tax benefits or income diversification they may be better suited for the B neighborhood.

It could be a very small business - one low maintenance rental or it could be someone's sole source of income.I think it really depend on what stage you are at financially on what makes sense in terms of diversification. 

The second is for diversification, so when you have a few rentals in your area, then diversifying to other areas seems like a wise move.I invest in passive out of my area turnkey properties only, because the numbers don't work where I live, and there are no turnkey companies here - probably for that reason.

I am a buy-and-hold investor who prefers (and currently owns) stock and bond index funds to gain controlled market exposure, so my interest is really just in risk hedging and diversification—or potentially higher profits.My aim is to divert much of my income to investments that will help me achieve financial independence at a relatively early age, retaining a realistic perspective about cyclical market conditions, loss, risk, and expected returns.Thanks.

However, I also would like to diversify into warm weather US, warm weather Carribean, and cold weather US (I have heard many great things about CO VRs) eventually (I'm talking like having this level of diversification in 10 years).  

This is of course why the conventional wisdom around diversification is what it is.

When doing a diversification or consolidation exchange the IRS is not concerned with the number of properties but rather the amount.  

While many of you have been wondering about the future of interest rates and the economic climate, it seems a very overlooked area is diversification.

It provides the opportunity for asset diversification, good cash flow and expected appreciation while remaining a mostly passive investment.