Even after the housing market collapse, many clients still adore real estate because it's both sexy and concrete. Advisors like it too because it can offer both diversification and yield.

"People are attracted to real estate because on a rental you can get 3% to 4.5% annual yield - and then through rental increases stay ahead of inflation," says Michael C. Berry, a CFP/CPA on Bainbridge Island, Wash. "They can't find that yield elsewhere."

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