Lesson

Liquid real estate investment trusts (REITs) are pooled investments that allow investors to invest in a diversified portfolio of real estate properties. These REITs are publicly traded on major stock exchanges, making them more liquid than other real estate investments. Investors can easily buy and sell shares of liquid REITs, providing a more accessible way to invest in real estate.

Practice Question #1

Which of the following best describes a liquid REIT?

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Terms

Liquid REITs:
Real estate investment trusts publicly traded on major stock exchanges provide investors with a more accessible way to invest in real estate.

Practice Question #2

What is a key advantage of investing in a liquid REIT compared to a direct real estate investment?

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Do Not Confuse With

Private REITs:
Real estate investment trusts that are not publicly traded, making them less liquid and more difficult for investors to buy and sell.
Direct real estate investments:
Purchasing physical properties directly rather than investing in a pooled investment vehicle like a REIT.

Practice Question #3

Which of the following is NOT a characteristic of a liquid REIT?

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Historical Example

In the early 2000s, the popularity of liquid REITs increased as investors sought more accessible ways to invest in real estate. This growth in demand led to new liquid REITs, providing investors with a wider range of options for investing in real estate.

Practice Question #4

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Real-World Example

An investor who wants to invest in real estate but does not have the capital or expertise to purchase properties directly might choose to invest in a liquid REIT. By purchasing shares of the REIT, the investor can gain exposure to a diversified portfolio of real estate properties without the need to manage the properties themselves.

Practice Question #5

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Rhyme

Liquid REITs are neat, a real estate treat, with shares you can trade, and profits well-made.

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