Real estate has created more millionaires than any other asset class in modern history. The appeal is intuitive: tangible assets, rental income, leverage, and long-term appreciation. But the method of accessing real estate involves meaningful trade-offs that every investor should understand before committing capital.
Direct real estate ownership gives you control over the asset, the ability to use leverage, direct income from tenants, and the potential for substantial appreciation. But it comes with illiquidity, management burden, concentration risk, and typically requires $100,000 or more in accessible capital.
A Real Estate Investment Trust (REIT) is a company that owns income-producing real estate and trades on a stock exchange. REITs are required by law to distribute at least 90% of taxable income to shareholders as dividends, making them one of the most reliable income-generating investments available. Advantages include liquidity, diversification, low minimum investment, professional management, and typical dividend yields of 3-6%.
For most investors, REITs are the more practical entry point into real estate. For investors with substantial capital and the desire for direct control, owning property provides advantages that REITs cannot replicate. At Aurion Trust Holdings, we incorporate both approaches into client portfolios based on individual circumstances.