Why Securitized Real Estate Should Be On Every Investor's Radar

The phrase “securitized real estate” may not be a familiar concept to non-professional investors. However, it pays to learn about this type of investment, as it offers investment benefits not found with other investment vehicles.

Securitized real estate is real estate that is packaged and sold as a security. This means it is regulated by federal securities legislation. This offers several benefits, including fuller disclosure and more suitable investments for some investors.

Traditional real estate investments have traditionally been popular with investors because they provide a regular monthly income stream, straightforward tax advantages, portfolio diversification and potential equity diversification. Yet, these benefits are often offset by concerns about the property management that comes along with such real estate. Add to this the fact that real estate is not highly regulated nor as transparent as securities, and it is easy to see why some investors gravitate to other, more regulated investments.

With the creation of securitized real estate, an investor can now enjoy the benefits of real estate ownership without the hassles of day-to-day management while also benefitting from a regulated investment. Securitized products provide an interesting alternative for the investor who wants to invest in real estate but also wants a higher level of security.

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