Are private REITs a good investment?

 Hello,

There are many types of investments an individual can make to gain profits in the market. It is advisable that people diversify these investments to minimalize the risk their investment portfolio is exposed to. Real estate investment trusts (REITS) offer just that! There are various types of REITS a person can invest into.

Private REITS is a good investment option to enter the real estate market. If you are confused about private REITs being a good investment option, here are a few reasons why you should invest in them.

  • Higher returns than their public counterparts

Regardless of which type of private REITs you decide to invest in, the good ones have a track record of providing higher returns when compared to their exact public counterparts. Private REITs provide their investors with higher returns on their invested capital amount than public REITs on the average comparison.

  • They are not very volatile

Since private REITs are not listed on the public indices, they are not affected by the fluctuations that happen in the public market and are one of the best ways to gauge the potential and strength of the real estate industry at any given point. The avalanche effect of the public markets is also easily avoided, wherein, when one of the major players of a certain industry has a falling stock price, the share price of their competitors in the same industry also starts to drop.

  • They have a lower compliance cost

Public REITs are regulated by the government of their originating country and to comply with these set rules many times they have to sacrifice a higher profit. Privately run REITs, however, are not regulated by any special government body, and thus are able to maximize their profit potential and take bold decisions to help them bear higher returns by taking rather riskier financial decisions.

I hope that my response helps you understand why private REITs are a good investment!


Source :- Are private REITs a good investment?


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