A. In one of our blog posts discussing different ways to investing in real estate, we introduced REITs as an effective way. REITs tend to distribute most of its earnings back to investors which make them great vehicles for retirees who need constant cash flows to cover daily expenses.
However, a warning is warranted here - be careful if you are working with a financial advisor and that person is directing your lifetime savings to private, instead of public, REITs.
2 Major Risks
There are two major risks associated with privately REITs:
a. Higher commissions for the sales people, which of course will hurt the investors' returns
b. You can't get out of them easily due to lack of liquidity.
A real sad story was shared at the edelmanfinancial.com, go check it out.