Private Real Estate Investing: Pros and Cons

Private real estate investing continues to attract plenty of interest. In recent years, more investors of sufficient means are turning to private equity real estate and real estate funds to diversify their portfolios with an asset class that offers both ongoing revenue and ownership of a tangible asset.

While private real estate investing can be lucrative, there are many important considerations to make before jumping in. This guide will explore some of the pros and cons of private real estate investing.

What Is Private Real Estate Investing?

Private real estate investing involves the direct ownership of property or contribution to a private real estate fund or partnership. It can be a more active form of investing than traditional avenues, as stakeholders are often directly responsible for maintaining the properties they own.

Private real estate investing is considered an alternative financial vehicle. Unlike public real estate investment trusts (REITs), private real estate isn’t traded on financial markets. It also demands a more managerial outlook than other typical items in a portfolio.

Residential properties are probably the most popular vehicles for private real estate equity due to their availability, ease of management, and potential…