Real estate is an asset class that offers limited liquidity as compared to other investments. It includes the ownership, management, rental or sale of the physical assets like land, building etc.
Whereas Cars, exclusive paintings, jewellery, furniture etc. fall under the category of personal assets.
There are several ways to enter real estate investing. This can be through Real estate investment trusts (REITs), multi-family housing, or buying rental properties.
If you are someone who doesn’t want to deal with tenants and monthly issues of maintenance, then rental housing is not an option for you.
But, if you are looking for good returns without getting involved in this, then REITs are for you!
REITs allow you to invest in real estate by buying some shares in commercial real estate portfolios. This helps you in catering return from various commercial properties at once. REITs include properties such as malls, complexes, hotels, hospitals, and other commercial infrastructures. There are different types of REITs such as-
- Equity REITs – Own and operate income-producing real estate.
- Mortgage REITs - Provide mortgage on real property.
- Hybrid REITs - Own properties and make mortgages.
- Publically traded - Listed on National Trade.
- Non - public traded- Not publically traded, but registered on SEC.
- Private - work only as private placement investment.
REITs offer attractive risk-adjusted returns, steady dividends, and stable cash flows. It is an excellent option to diversify the portfolio with other class of assets that can act as a counterweight to equities or bonds.