When it comes to real estate investment trusts (REITs), there are three primary types: private, registered non-listed, and listed. Each type has its own set of pros and cons, so it’s important to understand the distinctions before you invest. In this blog post, we’ll break down each type of REIT and help you decide if one is right for you.
Private REITs are owned by a small group of investors and typically offer more flexibility in terms of investment strategy. For example, private REITs may be able to make quick decisions about their investments without the need for shareholder approval. On the other hand, private REITs have fewer liquidity options than registered or listed REITs, meaning that it can sometimes be difficult to sell your shares if you need to access your capital quickly.
Registered, non-listed REITs are similar to private REITs in that they provide some level of control over investment decisions and also tend to offer less liquidity than listed or public REITs. However, unlike with private REITs, registration with a regulatory body means that these investments are typically more transparent and easier to evaluate.
Listed REITs, also known as public or traded REITs, can be bought and sold like stocks on a stock exchange. This means that they offer much greater liquidity than private or registered non-listed REITs. Additionally, because they are publicly traded, listed REITs have relatively low investment minimums and often don’t require you to be an accredited investor to participate. However, the higher levels of liquidity that come with listed REITs also mean that there is greater risk of price volatility when compared to other types of real estate investments.
Ultimately, whether you should invest in a real estate investment trust depends on your individual financial situation and investment goals. To decide if a REIT is right for you, it’s important to consider factors such as your risk tolerance, time horizon, and investment goals. If you’re considering investing in a REIT, be sure to do your research and consult with an experienced financial advisor to help guide you through the process.
If you’re studying this information for the Series 7 exam, keep in mind that REITs are just one of many types of real estate investment options available. To prepare for the exam and become a successful real estate professional, it’s important to develop a solid understanding of all the different aspects of investing in real estate. Whether you’re exploring private or public investments, take the time to learn about the risks and benefits associated with each type and make sure your decisions are aligned with your financial goals. With the right preparation, you can become a confident and knowledgeable investor in no time!
These and many other topics will be covered on the Series 7 exam. Achievable offers a free Series 7 practice exam to prepare you for the Series 7 Exam. With our Series 7 training program, you’ll learn everything you need to know about the Series 7 exam so that you can feel confident and prepared on test day.