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.
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