If you don’t already have a significant chunk of your net worth invested in rental property, it’s time to think about buying stock in real estate companies. But in our first Real Estate Stock Talk, Alexander Goldfarb, a seasoned stock analyst, and Peter Slatin, a veteran journalist and industry observer, suggest you go slow.
Forbes: Let’s talk broadly about investing in real estate. Ibbotson Associates and other research firms say we all ought to have a big chunk of our net worth in investment property. Just owning a house doesn’t count. Something like 10% to 20% of our net worth should be in rental property–offices, warehouses shopping malls, hotels, apartment buildings, college dorms, prisons, self-storage or whatever else we can think of.
But how? Should a reader, wealthy or not, buy a property himself or herself? Invest through private partnerships? Or should he or she prefer realty stocks, and in particular, REITs? These are large enterprises that own many, many buildings, whose shares trade on stock exchanges in New York or overseas and pay out rental income in the form of dividends.