The Best REIT You Haven't Heard of but Need to Invest In | Investing 101

TL;DR

Real estate investment trusts (REITs) provide higher returns than stocks and offer protection against inflation. They are a convenient and cost-effective way to invest in real estate without the hassle of property management.

Transcript

Real estate investment trusts are absolutely critical to filling the gaps in your property investing strategy but the REIT vs real estate debate isn’t over. By the end of this video, you’ll know why REIT stocks beat the market and the best new REIT investment for your portfolio. We’re talking real estate investing today on Let’s Talk Money. Joseph ... Read More

Key Insights

• ✋ Real estate provides higher returns and better inflation protection compared to stocks.
• 🔬 Investing in both stocks and real estate offers portfolio diversification and steady wealth growth.
• ♿ Buying and managing properties can be challenging and costly, limiting accessibility for many investors.
• 💨 REITs offer a convenient way to invest in real estate, providing high dividends and professional management.
• ✋ Online REITs offer higher dividend yields and better flexibility in property selection.
• ♿ Some online REITs are only available to accredited investors, but accessibility is improving.
• 👋 Diversifying a real estate portfolio with a combination of direct investing, REITs, and online REITs offers the best of all worlds.

Questions & Answers

Q: Why are real estate returns better than stock returns?

Real estate returns outperform stocks because of consistent growth and the ability to generate cash flow through rental income. The value of real estate also tends to increase with inflation, providing a hedge against rising prices.

Q: Are there any advantages to investing in both stocks and real estate?

Yes, combining both asset classes in a portfolio allows for diversification and the ability to earn money from different sources. It ensures that your wealth grows steadily, regardless of market conditions.

Q: Why is property investing challenging for many investors?

Property investing requires significant capital for down payments, property management skills, and time commitment. It can be financially risky, especially if investing a large portion of your savings into a single property.

Q: What are the benefits of investing in REITs?

REITs offer a convenient way to invest in real estate without the need for direct property ownership. They provide high dividends, professional management, and the ability to buy shares just like stocks.

Q: What are online REITs, and why are they attractive?

Online REITs are smaller portfolios of properties with non-traded shares. They typically offer higher dividend yields and better flexibility in property selection. They are attractive because they have less volatility and lower operational expenses compared to listed REITs.

Q: Are online REITs accessible to all investors?

Some online REITs are only available to accredited investors, but platforms like stREITwise are making online REITs accessible to all investors. However, it is still a relatively new development.

Q: How can I diversify my real estate portfolio?

By combining direct property investing, REITs, and online REITs, you can achieve diversification and enjoy the benefits of different investment strategies. This approach allows for a mix of cash flow, pride of ownership, and professional management.

Summary & Key Takeaways

• Real estate returns consistently outperform stocks, with a 1,800% return over 30 years compared to 731% on the S&P 500. Real estate also provides better protection against inflation.

• Investing in both stocks and real estate allows for steady wealth growth, regardless of market fluctuations.

• While buying and managing properties can be challenging and costly, investing in REITs offers the opportunity for double-digit returns with minimal effort and a small investment.