Article 3 of 5: Real Estate As An Investment Option

This is the third in a series of five pieces to help investors understand the benefits of owning commercial real estate, then differentiate the dynamics and variety of ownership channels.

Many investors get started in real estate by owning one or more individual properties

They may elect to rent a former home, acquire a property that already has a tenant, or inherit a property that they decide to rent.  In this case, the owner must choose to engage a property manager or become the landlord.  In addition to dealing with tenants, repairs, and maintenance, there are periodic costs for roofs, painting and prepping between tenants.  

Rather than become a landlord, an investor may choose to get exposure through real estate securities, in the form of mutual funds, exchange-traded index funds or a host of public REIT stocks. These allow investors to own a slice of a professionally managed real estate portfolio, made up of hundreds or thousands of properties. 

Public real estate securities trade on major stock exchanges, so they can be easily bought and sold.

Because they are publicly traded, they are priced based on market supply and demand, and are more correlated to corporate stock than private, or non-traded, real estate investments.

Non-traded REITs give investors the advantage of owning private real estate while avoiding the fluctuations of public markets.  Click below to learn more about private real estate investments.


If you’re interested in learning more, reach out to us about your situation

Access our fourth installment, “Advantages of Owning Private Real Estate Portfolios”