A wealth planning advisor can help you decide whether to invest in individual properties or in Real Estate Investment Trusts. The advantages of individual investments are that you retain control over the investment. The downside of an REIT is that it is fully managed and you have little control over which properties are added to it. While you can invest in a REIT to benefit from a higher level of management, individual real estate investments give you greater control.
Portfolio diversification
Diversification is a key factor in ensuring the longevity of a portfolio. By diversifying your assets, you can minimize losses during bear markets while preserving capital for bull markets. Diversification also reduces volatility. When you have more than one type of investment in your portfolio, you can easily control your risk by adjusting the allocation to each type.
Diversification is important for new investors. When you concentrate a large portion of your portfolio into a single asset, you may not realize that your total returns are limited to that one asset. A diversified portfolio also reduces the risk of experiencing a large loss at once.
Low transaction costs
Real estate investment trusts are perfect for investors who are looking …
