Property co-investment is commonly associated with REITs. Although there are stark similarities in terms of crowdfunding to purchase properties, there are significant differences with how the deals are being structured.
REIT is usually publicly traded in the stock exchange, similar to ETF (exchange traded fund). Investors usually own a small share (depending on the amount of shares an investor is willing to purchase) of the REIT company, while the REITS company owns and manages different investment properties. Usually investors do not have the liberty to select the investment property which he/she is interested in (unless he/she is a significant board member). The REIT company will make all decisions on the real-estate investment and how the property is being managed.
On the other hand, property co-investment allows investors to select, and construct their property investment portfolio based on their personal risk appetite. Investors have the freedom to allocate where their capital is being invested. There is also more transparency in terms of how the investors’ capital is being invested for co-investment, unlike REITS where most information can only be obtained from the yearly and quarterly financial statements produced by the company.
Check our the advantages and disadvantages of REITS and Co-investment:
https://www.realvantage.co/insights/reits-or-real-estate-coinvestments/ and
https://www.realvantage.co/insights/, for more information on real estate investments.
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