Summary
- For years, REITs have been shunned as “common stocks” by real estate investors and treated as “quirky real estate” by stock investors.
- REITs are real estate organizations, not just packages of properties or real estate mutual funds.
- Three essential determinants of long-term real estate risk are debt leverage, lack of diversification, and poor management of properties and portfolios of properties.
- Although real estate investments have often been highly leveraged, it is the high debt leverage, rather than real estate itself, that is the major risk.
- Real estate owners may, at times, benefit from inflation, but inflation is not a principal reason for owning real estate.
- Market factors such as supply and demand, interest rates, the existing ...
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