The Different Types of Real Estate Investment Trusts (REITs)


Real estate investment trusts, or REITs, have become a popular way for people to invest in the real estate market. There are several different types of REITs, and each has its own benefits and drawbacks. In this blog post, we will discuss the three most common types of REITs: private, registered non-listed, and listed. We will also talk about the pros and cons of each type of REIT so that you can decide which is right for you!

The first type of REIT

The first type of REIT that we will discuss is the private REIT. Private REITs are typically owned and managed by a small group of individuals or an individual investor, and they do not need to be registered with the SEC. Because these types of REITs are not publicly traded, they can offer investors greater flexibility in terms of how the assets are managed. However, one key drawback of private REITs is that they may be difficult to exit once you have invested in them. This is because they are not listed on a stock exchange, and can therefore be difficult to sell.

The second type of REIT

The second type of REIT that we will look at is the registered, non-listed REIT. This type of REIT is typically more widely available, since they are typically sold through an investment broker or fund manager. Unlike private REITs, these types of trusts must be registered with the SEC, which helps to provide investors with some level of security. However, one major drawback of registered non-listed REITs is that they are not publicly traded and therefore cannot be easily liquidated if needed. This may be a major drawback for some investors who are looking for more flexibility in terms of exiting their investment.

The final type of REIT

The final type of REIT that we will discuss is the listed REIT, which is typically traded on a public stock exchange such as the NYSE or NASDAQ. This makes it significantly easier to liquidate your investment if needed, since they can be sold just like any other publicly-traded stock. Another key benefit of listed REITs is that they tend to be much more transparent than registered non-listed REITs, since all information about the trust must be disclosed by law. However, these types of trusts may also come with higher fees and costs associated with buying and selling shares, which can make them less appealing to certain types of investors.

Ultimately, the choice of which type of REIT to invest in will depend on your individual investment goals and preferences. If you are looking for greater flexibility and liquidity, then a registered non-listed or listed REIT may be right for you. On the other hand, if you prefer to have more control over how your assets are managed, then a private REIT may be a better fit for you. No matter which type of REIT you choose, it is important to do your research and understand the unique pros and cons associated with each one before investing.If you are studying this material for the Series 7 exam, know that there are many other topics that you will be tested on. Thankfully, Achievable offers a free Series 7 mock exam to prepare you for the Series 7 Exam. So, if you’re ready to start studying for the Series 7 exam, visit Achievable today!

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