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> However, buying a percentage ownership in a property still remains a difficult problem. If I want to passively invest in income from real estate, can't I jus
by greenyoda 7y ago
> However, buying a percentage ownership in a property still remains a difficult problem.
If I want to passively invest in income from real estate, can't I just go to my brokerage site and buy shares in a REIT?[1]
And wouldn't having the diversification of a REIT be safer than owning a percentage of a single rental property?
[1] https://en.wikipedia.org/wiki/Real_estate_investment_trust#United_States https://en.wikipedia.org/wiki/Real_estate_investment_trust#U...
- soheil 7y agoTypically more diversification means lower returns, using AlphaCap.ai you can invest in individual properties whereas with REITs you don't have control over which properties your money is invested in. We also distribute a share of the monthly rental income to you from each property you invest in.
- jaworrom 7y agoSafer, maybe, but nothing beats truly owning real estate. I have a few rental properties, all managed by a property management co. I can cash out re-fi and roll it into another property tax free, rinse and repeat. Buy > Rehab > Rent > Refinance > Repeat. I can take the property and sell if it appreciates. I can do a 1031 tax exchange for a similar property. Or I can just continue to rent it out. Best part is I can use other people's money as leverage to buy much more property, and if the deal makes sense at the time of purchase/deal analysis, I won't be over-leveraged and will stand to make money, with multiple exits as options. After paying off the note, I can seller finance it to someone (rent-to-own) if I wish, at whatever interest rate I/my buyer deems appropriate. Can't do that with REITs, unfortunately. But in terms of being truly passive, REITs fit the bill!