REITs vs. Owning Property
Should you buy a rental property or buy REITs? Each path offers real estate exposure with very different amounts of money, work, control and risk. Here is a side-by-side comparison.
Side by side
| Rental property | REITs | |
|---|---|---|
| Money needed | A down payment, often tens of thousands of dollars | The price of one share |
| Diversification | One property, one location | Hundreds of properties |
| Work | Tenants, repairs and vacancies | None |
| Liquidity | Months to sell, with high costs | Sell in seconds |
| Leverage | Mortgage magnifies gains and losses | Built into the REIT |
| Control | Full | None |
| Tax perks | Depreciation deductions and like-kind exchanges | Partial deduction on dividends |
General comparison; your situation and local rules matter.
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