REIT vs Rental Property: Which Should You Invest In? 

Are you looking to add to your financial portfolio with a real estate investment of some description? Portfolio diversification is one of the biggest factors in mitigating risk and securing your financial future. 

But with so many different kinds of real estate investments available, how can you determine which one is best for you? This guide can help.

This article is going to be comparing the difference between REIT vs rental property. What each one is, their benefits and drawbacks, and why one might suit you over the other? If you’d like to learn which would be the savviest investment for you, read on now.

What Is a REIT?

REIT stands for real estate investment trust. This is a type of investment that involves you purchasing shares of a trust that in turn owns and manages a property or properties. If you’re new to the world of property investing, or you’ve got less money to play around with, then this could be a good option for you.

When it comes to investing in a REIT, you won’t have much of a say in anything to do with the property. It’s merely a financial transaction of sorts.

Investing in a Rental Property

Investing in a rental property involves scouring the market, identifying an opportunity, making a bid, and then ultimately becoming a landlord. There’s a greater level of work and responsibility involved in this kind of investment.

Although you can hire a property management company to assist with your rentals, there will still always be a certain amount of work that is necessary. There’s also the potential for tenant disputes. If you’d like to learn more about what rental property ownership entails, read more here.

REIT vs Rental Property

Both options have appealing aspects and drawbacks. A REIT is perhaps easier, and there’s less money required upfront. But you won’t get to have your say in anything to do with the property.

If you’re not afraid of hard work and you’re looking to build something from the ground up, then investing in a rental property could be a good choice for you.

Ultimately, you’ll have to take a look at your own financial position to determine which of these options is right for you. Do you already have one of these options on your books? If so, opting for the alternate choice for diversification’s sake could be a good move.

Think about how much funding you have access to, or how easily you’ll be able to raise funds for this project. These are all considerations that can help you make your final decision.

Should I Buy a Rental Property?

At the end of the day, even after tireless comparisons of REIT vs rental property, it’s down to what makes the most financial sense for you. If you’re still confused, try speaking with a trusted business advisor to see what they’d do in your shoes.

For more property hot tips, don’t go anywhere. We’ve got plenty on the rest of this site.