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Traded vs. Non-Traded REITs: Which Is Best for You?

Many factors come into play, including risk tolerance, timeline, and your short- and long-term goals.

[Updated: Aug 10, 2021 ] Aug 15, 2019 by Jason Hall

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REIT Type Pros Cons
Public REITs
  • Highly liquid.
  • Easily accessible to investors of all types.
  • SEC regulatory oversight reduces risk for individual investors.
  • More volatile than other options.
  • Subject to market valuation swings like other equities.
  • Lack of required holding period can result in selling for a loss during market downturns.
Private REITS
  • May offer higher-return investments than available on public markets.
  • Long-term holding period helps management focus on long-term strategy.
  • Reduced regulatory oversight means lower operating costs, which can boost returns.
  • Accredited investor requirement eliminates accessibility for most individuals.
  • Large minimum investment requirements further reduce investor pool.
  • Limited or no redemption plan may make it difficult or impossible to sell.
Public Non-Traded REITs
  • Potentially higher-quality investments available.
  • Required to submit financial disclosures -- including audited annual filings -- to the SEC; also subject to state regulatory scrutiny.
  • Lack of public trading and long-term holding requirement can help management focus on long-term strategy.
  • Minimum investment requirements.
  • Broker fees and commissions.
  • Minimum holding period requirements may not match up with individual investors’ goals.

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