The Value of Real Estate Exposure
Real estate offers recurring cash flow, physical tangible value, favorable tax treatment through depreciation, and leveraged capital appreciation. However, how you access the market changes your daily responsibilities.
Physical Property: Leverage and Control
Direct property acquisition allows you to control leverage with fixed-rate mortgages and claim tax deductions through depreciation. However, it requires active tenant management, capital expenditures, and illiquid capital commitments.
REITs: Liquidity and Passive Scale
Real Estate Investment Trusts (REITs) trade on public stock exchanges, distributing at least 90% of their taxable income to shareholders as dividends. They provide completely hands-off exposure to commercial assets (data centers, hospitals, logistics warehouses) with high liquidity and zero landlord obligations.