REITs vs Rental Property | Best Real Estate Investments

We should explain what a REIT and rental property are.

Rental Property - A rental property is when you invest into a specific property (house/flat), and then rent it out for income (when your tenants pay you rent). Although some people pay this with cash, the majority of people do end up taking out a mortgage in order to finance this.

REIT - stands for Real Estate Investment Trust. It’s essentially a corporation which owns many real estate assets which produce income. Think of it like an ETF, just with property. These assets can be anything from office buildings to hotels and residential properties. These funds are mandated to pay out 90% of their income as dividends which means they tend to be a pretty reliable source of dividends.

In this video, we weigh the pros and cons of rental property vs REITs in terms of the time and effort required, liquidity, leverage, control, returns, convenience, diversification, down payments, taxes, and interest on debt. We also discuss out current plans for our real estate investing. If you are interested in REIT investing, dividend investing, REIT stocks, or rental property investing, this is a great video for you. Consider it real estate investing 101 or real estate investing for beginners. Rental property vs stock investment is an important decision to make so you will want to weigh all the relevant pros and cons prior to investing.

Which do you prefer to invest in, REITs or rental property? What do you think are the pros and cons? Leave your thoughts in the comments below. We look forward to hearing from you.

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DISCLOSURE: I am long O.

DISCLAIMER: All information and data on this YouTube Channel is solely for entertainment purposes. The information herein is based solely on my personal opinion and experience. All investments hold inherent risk, and the information provided on this YouTube Channel should not be interpreted as guidance, recommendations, offers, advice, or suggestions. Any ideas and strategies discussed on this channel should not be implemented without first considering your financial and personal circumstances or without consulting a financial professional.

[pandabossanna]

Had so much fun making these videos with you! :)

[TradingWithCJ]

Great video mate! Very useful for people who cant decide between physical property investing, & buying Reits 👊🏼👊🏼 great job guys

[stevebaldwin]

Seriously and consistently solid videos, man. Thank you for this! It was really helpful.

[michaelflanary]

I like REITS over rental properties. Your argument of REITS over rental property from my original analysis many years ago is spot on. I do not like the risk of trying to make money with borrowed money. Also, dealing with all the people does not appeal to me. I like REITS because they allow me to invest all around the US not just in my community.

[samuelwhite]

Another amazing video!! Keep them coming!

[Damian-lzhb]

Very Nice video Ben, as always, I like the collaboration between both of you.I can't wait for another Ben's Video.

[davidsdinero]

Overall owning rental property sounds more lucrative, but the sweet thing about REITs is that they are accessible to anyone since you don't need much money to start investing!

[ItsMandy]

There's a lot I need to think about here! Thanks for making this video and I will definitely be subscribing!

[makesaveinvest]

For the moment I love REITs since the minimal money amount to start is what ever money we have!! But for sure I'm eye balling and saving for my first rental property!!

[peterbrown]

Awesome video! I love the comparisons between the two. Very informative.

[Almightykingtay]

I’m new to all this real estate stuff but I like the idea of REITS better at least to starting off for now sounds like the better deal for me. Great video and I appreciate the info you gave 👍👍👍👍

[ViviFriend]

Such a nice collaboration! 😊
Glad to find your channel Ben, lots of helpful videos for investors. Thanks both!

[MoementumFinance]

Really like this collaborative video. Very well done 👍 For me, I am invested in REITs but like to transition to purchasing rental proprty within the next 1-2 years. Thanks for the video 😎

[ChampagneCents]

Wow nice to meet you Anna, you're awesome! I love REITs, although I hope to become an owner of a vacation rental one day.

[themoneyx]

Great video, I recently bought my first rental property and it's been a great journey!

[brainstrains]

This is a great collaboration. I really enjoyed the video.
Some people detest Real Estate, do not want to deal with so many issues...
Everything, as you said, has pros and cons.
Cheers to your channel from Brainstrains.

[jamesanderson]

Great comparison! I hear so many people talking about rental property, but I have never seen those states on the returns. Guess I am sticking with REITs!

[Kimmyg]

New subscriber here and I've got to say, I love the format of your video! The graphics and editing is on point! I'm glad you brought up real estate investing in this video - it's such a hot topic! I like your comparisons! Although REITs are less stressful, I guess I'm an oddball and prefer rental properties! Haha guess it's more of an aspiring hobby :) Great channel! Catching up on your vids now!

[ethosinvesting]

Nice collaboration. Right now REITs make the most sense. I'll be looking for deal in the market once things shape out in the next 6-18 months. I love Realty Income too. All the best.

[fififinance]

Your point around leverage is so important - when acquiring cash-generating assets that far exceed the cost of financing then it is good debt to have. Though you do pay for that return with the stress of managing a property business so I do yoga :-/