Source: White Coat Investor —
A lot of people don’t think of me as a “real estate investor,” which I find surprising given that I own enough investments in real estate to live off of for the rest of my life. I’ve owned everything from an individual rental property to a publicly-traded REIT index fund. I’ve even been the chairman of the board of a real estate syndication. I may not be the most knowledgeable real estate investor on the planet, but I certainly know enough to be considered a successful real estate investor.
Despite my experience in real estate, I started my investing career as a mutual fund investor, and I still prefer a mutual fund-like experience with my investments. I love the
Access to investments,
Low costs,
Liquidity,
Diversification,
Professional management, and
Pooled costs.
I particularly love the passivity of an index fund. I find it ironic that those who most claim to love passive income tend to have the most complex portfolios. The more complex the portfolio, the more hassle you will have
Managing the portfolio,
Dealing with the taxes for the portfolio, and
Passing on the portfolio after your death.
So, when I consider private real estate investments, the more it acts like a mutual fund, the more I tend to like it. Now don’t get me wrong, as I wrote in The Case for Private Real Estate, I love the high returns, depreciation-sheltered income, illiquidity premium, and low correlation with the stock market that private real estate can provide. I just want to get it in a vehicle that operates as much like a mutual fund as possible.
