Investing in REIT vs Multifamily

Investing in real estate to build your wealth is a smart decision, but you still got a couple of choices to make, like - which way to invest in? REITs or Multifamily?

If you are clueless about what any of it means, I’m here to explain both so you can decide, which seems like a better investment for you.

Multifamily is one of the most common types of real estate investment and there are many reasons why. Most importantly its the safest choice, investors are attracted to the fact that you have a steady income every month and chances of you staying with nothing is practically nonexistent. What makes it possible are the multiple units that are rented by multiple tenants, and even if one unit is vacant, you still get paid by others. Additionally, you could even live in one of the units to save living costs, so in case you couldn’t decide if either make an investment or buy the house for yourself, the problem is now solved with Multifamily.

When it comes to REIT (Real Estate Investment Trust) everything is not as simple. REIT is a group of investors who put their money together and then a company’s manager decides which real estate to buy or sell. Afterward, investors get paid either monthly or with a quarterly dividend check. Basically you never actually own the business and clearly you could never live in it. Investing in REIT can be quite risky compared to Multifamily since its success depends on actual prices on the market and it can simply under-perform. And although passive income from REIT may sound exciting, it lacks liquidity, which means that you might not be able to sell or buy properties when you actually need money.

To sum things up, starting something on your own and having absolute control over it is always better than owning a share and spend your time hoping for a better outcome.