Our clients have done well when they found a home with a small in-law/casita addition to the subject, brings a nice diversification.

Diversification is also a great reason to do both.

Passive investing so it's not you taking late calls or handling property issues, tax benefits, typically a cash flowing investments, diversification.

Additionally, the diversification that comes with a fund investment can spread out potential risk that could be present in a single property.Higher returns: Larger properties create economies of scale that result in better cash flow.

We own the beach house not to make money, but to protect our assets, i.e. diversification, so we are totally fine with a 5% return (similar to a conservative mutual fund) and want the investment to be as much hands-free as possible. 

For a little diversification, maybe pick one other market or just do another one in the area where you live and know best, but I fell for the lie that more total doors/assets is better. 

If non-retirement funds are invested into real estate, even restrictive retirement accounts can provide diversification in addition to tax benefits.

We invest in both the stock market and real estate because diversification is one of the best investing tools there is.

For you US people to get what I'm talking about: Oslo is more like San Francisco or Bay Area, with more money, better climate and quality of life, while Bergen is more like Phoenix (just replace the crazy heat of Phoenix with rain every day all year round except from a couple of months during the summer).Rental yield will be a lot lower in Oslo and it would be more of a speculation on price appreciation, while Bergen would be more of a conservative bet with higher yields but prices appreciating a lot slower (Oslo: 15-20%, Bergen: 4%).The most practical would be to invest in Oslo where I live so I could get some economy of scale, but then I would lose the diversification bit and could potentially be really ****ed if the market turns too soon. 

Diversification is my goal.