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What is the difference between investing in a REIT or physical real estate? Why not just buy a periphery to drive into the real estate market? What advantages and differences come with REITs instead?
For starters, putting your money into a REIT is far less hassle. Remember, you are not doing all the legwork t find the right investment properties. Instead, you are landing your money to a team of professionals who will do everything for you. Less hassle is a big, enticing draw for many people who do not want to get bogged down with the day to day problems of physical real estate. With REITs, you do not have to deal with any of that.
You also do not have to have to spend as much when you are buying into a REIT. When you invest your money in an actual piece of property, you will have to spend thousands of dollars upfront. But with a REIT, you will be paying much less. You would not be the sole owner of the property but the smaller entry print is a great draw and a massive benefit. Yu can get started with as little or as much as you want. What to start with $100? Done. What throw is a few thousand? Sure. Whatever starting capital you have, you can make it work.
And of course, you have less risk with a REIT. Now, some people might say more risk equals more reward, which can be true. But it you play your cars right, the payoff from REITs can be incredible. How to pick the right REITs and formulate a plan that will help you create long term success.
Many benefits come with investment in REIT appreciation is one of them, diversification is another, ease of use, predictability and the lack of volatility are just a few more.
Overall, REITs are an excellent way for a first time investor to try their hand at the real estate market. It is also a great way for a seasoned investor to find a new way to make money. Whether you have been doing this a long time or are new to the game, the upsides outweigh the downsides.
But you can only set yourself up for success in REIT investing if you learn some important characteristics, For example, did you know there are different categories of REITs? There are varied classifications of REITs and the more you know, the better would be.
