Sorry, but it is clear you do not understand these investments.
REITs, whether public or private, are funds.
I am not talking about funds.
REITs usually invest in multiple vehicles to diversify. When you put in $100K in an REIT, it is spread across multiple properties. Some of it may even be used to lend money.
When you invest in the investment I speak of, you are investing in one property. There is no diversification.
When you invest in an REIT (or even in an index fund), you have no ownership of the actual investment vehicle. The REIT manager(s) do, but you don't.
When you investment in the investments I speak of, you are a part owner on paper (even if you have no say in the operations). As a result, you get all the tax benefits of owning a property. When you invest in an REIT, the tax code does not entitle you to any of those tax benefits. The REIT fund may mislead a bit in their wording, but at most they are saying that they'll pass on some of the tax benefits that they accrue to you, so you get a higher return.
There is little to no regulatory barrier to investing in an REIT, which is why their minimum investments are not that high.
The investments I speak of can allow a maximum of 35 non-accredited investors (by law). That is one big reason they carry such high minimum investments - they need enough money to buy a property and have a limited number of folks who can supply it.
In this thread I speak primarily of RE investments, because that is where I have the most knowledge. But the larger principle I speak of applies to other investments - not just RE (people investing in farms, storage businesses, car washes, hotels, etc). Again, the barrier is a rather large minimum investment and accredited status.
Again, most of my investments are in simple index funds, and I stuck to those for almost a decade because I didn't find anything better. I'm a conservative investor, and I always analyze any investment to see if there's a good chance it will exceed the S&P 500 returns in the long run. If it's not clear that it (easily) can, I do not invest. I suggest you do as I did: Join an investment group, and examine/analyze the investments they present. Learn the risks/rewards, and you'll then see that higher return (but higher risk) investments exist. They are higher risk because they are not diversified.
Comments
Sorry, but it is clear you do not understand these investments.
REITs, whether public or private, are funds.
I am not talking about funds.
REITs usually invest in multiple vehicles to diversify. When you put in $100K in an REIT, it is spread across multiple properties. Some of it may even be used to lend money.
When you invest in the investment I speak of, you are investing in one property. There is no diversification.
When you invest in an REIT (or even in an index fund), you have no ownership of the actual investment vehicle. The REIT manager(s) do, but you don't.
When you investment in the investments I speak of, you are a part owner on paper (even if you have no say in the operations). As a result, you get all the tax benefits of owning a property. When you invest in an REIT, the tax code does not entitle you to any of those tax benefits. The REIT fund may mislead a bit in their wording, but at most they are saying that they'll pass on some of the tax benefits that they accrue to you, so you get a higher return.
There is little to no regulatory barrier to investing in an REIT, which is why their minimum investments are not that high.
The investments I speak of can allow a maximum of 35 non-accredited investors (by law). That is one big reason they carry such high minimum investments - they need enough money to buy a property and have a limited number of folks who can supply it.
In this thread I speak primarily of RE investments, because that is where I have the most knowledge. But the larger principle I speak of applies to other investments - not just RE (people investing in farms, storage businesses, car washes, hotels, etc). Again, the barrier is a rather large minimum investment and accredited status.
Again, most of my investments are in simple index funds, and I stuck to those for almost a decade because I didn't find anything better. I'm a conservative investor, and I always analyze any investment to see if there's a good chance it will exceed the S&P 500 returns in the long run. If it's not clear that it (easily) can, I do not invest. I suggest you do as I did: Join an investment group, and examine/analyze the investments they present. Learn the risks/rewards, and you'll then see that higher return (but higher risk) investments exist. They are higher risk because they are not diversified.