Interest in real estate investment is growing, much of it focused on REITs. However, a strong alternative is private real estate. While REITs trade shares on an open market, private real estate investments are not open to the general public. When buying private real estate, investors can purchase equity (ownership) or debt (mortgages). Private property investment brings with it higher potential returns, but also lower liquidity. One caveat: some forms of private real estate investment are restricted to accredited investors who have higher levels of personal wealth or income.
- Private real estate investments acquire either equity or debt, and can include pooled investments or investment in funds.
- Such investments have low liquidity, but investors receive an “illiquidity premium” in return.
- Some private real estate investments are restricted to accredited investors who have a higher level of wealth or income.
“Private real estate offers investors the opportunity for wealth preservation and portfolio growth in a way that other types of investment do not.”