Investing in Publicly Quoted Property Companies
It can take a considerable amount of money to invest in property. If you don’t have this kind of cash, or simply don’t want to invest so much, then purchasing shares in a publicly quoted property company is an option. You do expose your investment to the vagaries of stock market sentiment, which may have nothing to do with your chosen company or the property industry in general. In some countries, such as the US, investment may also be made via Real Estate Investment Trusts (REITs), entities which own and manage large property portfolios. You’ll find more info on REITs at www.reit.com.
The biggest problem for most property investments is liquidity. Investing in property related shares avoids this problem as you can sell shares in the company whenever you wish. Although you are not guaranteed to make a profit, at least you can recoup some portion of your funds fairly quickly. Selling a property when you need to can often be problematic and, at best, will take a significant period of time. If you need funds urgently this can be a very big problem. Share investment is a cost effective means of investing in property without having to commit huge amounts of funds, but it is not very hands on or transparent, which can put off real property investors.
