BiggerPockets Daily 8 Reasons Why REITs Are More Rewarding Than Rentals
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Jan 1, 2025 This discussion highlights the advantages of investing in Real Estate Investment Trusts (REITs), emphasizing their potential for greater returns and efficiency. It debunks common misconceptions, such as concerns about leverage and tax efficiency. Listeners learn how REITs utilize external growth strategies to boost cash flow and dividends, and how their size allows better rental negotiations. The conversation showcases the superior management of capital and talent within REITs, making them a compelling alternative to traditional rental properties.
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REITs vs. Rentals
- Jussi Askela prefers REITs over rentals due to perceived discounts and higher potential returns.
- Many disagree due to misconceptions about leverage, taxes, and management.
REIT Leverage
- Investors misunderstand REIT leverage; you don't take out a mortgage directly.
- REITs are already leveraged, using your investment as equity and adding debt on top.
REIT Tax Efficiency
- REITs are tax efficient due to factors like zero corporate taxes and tax-deferred growth.
- Jussi Askela claims to pay less tax investing in REITs than in rentals.