EPRT - What I Wish I Knew Before Investing In REITs Instead Of Rentals
2024-07-10 14:54:10 ET
Summary
- REITs and rental properties are two of the most popular methods for investing in real estate.
- While REITs have many advantages over rental properties, there are also some important differences between the two investments that can significantly impact the performance of the investment.
- I go over these differences to explain why, in some cases, rental properties may significantly outperform REITs despite the enormous advantages that REITs hold over rental properties.
I recently discussed why I invest in rental property REITs instead of rental properties. The biggest reason for this is that REITs ( VNQ )( RQI ) give you much greater diversification than investing in physical rental properties. For example, Avalon Bay Communities ( AVB ) offers a broadly diversified portfolio of multifamily properties that you can get instant access to just by simply purchasing a share or even a fractional share in some brokerages. It would take a massive fortune for an individual rental property investor to be able to even come close to that level of diversification when investing in physical multifamily rental properties. REITs also come with professional management that knows the industry and how to run the property portfolio much better than I would be able to as a part-time real estate investor. This also makes the investment much more passive than it would be if I ran it myself....
What I Wish I Knew Before Investing In REITs Instead Of Rentals