For more on real estate investing, I write a lot on the topic here: https://ramenretirement.com/
I actually bought a house 5 years ago, and I really feel I totally lucked out. Back then though, the fear of rising interest rates scared me into buying. Like you, I don't expect those type of returns with any investment I make now... but I was thinking about diversifying my finances, and moving money away from stocks into property real estate.
I know that I'll have to be much more diligent about finding the right market/deal. I'm using Bigger Pockets at the moment which is quite an amazing resource. Thanks for pointing me to your site too.
https://ramenretirement.com/2018/05/16/interest-rate-impact/
Doesn't mean you shouldn't invest - just figure out what sort of returns you're willing to accept (along with the corresponding risk / cushion you need), and hold that line when you run your diligence. FWIW, I think you can still find single family investments in the midwest that will generate 8%+ cash on cash returns (after fully accounting for all direct, and reserved expenses). That's still a pretty good return, but getting harder to find.
It's hard to say when the market will soften or correct, so a dollar-cost-averaging approach to buying RE is probably a good idea (i.e. buy a rental property every quarter, or every half year.).
Given that pretty much everything is going right in the economy right now, my investment stance is more conservative. It's not a bad time to buy, but it's definitely not a fire sale. Bigger Pockets is a great resource. Drop me a line if you ever want to chat in more detail. I've gone pretty deep in the whole space, and have a background in investing and finance.
Given that interest rates will rise, there will be more demand in the rental market. I don't think REITs will be a good option because of the potential for higher interest rates but investing in a property, locking in that interest rate, and generating positive cash flow from rent would be a sound decision?