There are many benefits to direct real estate investment and it is easy to see why buying to let is an attractive investment option.
However, it is also easy to overlook the considerable costs you can incur and the drain this type of investment has on your time. The downsides include a lack of diversification, lower liquidity, vacancies leading to loss of rental income, property taxes and insurance and maintenance costs.
This is part of the reason real estate investment trusts (Reits) have become so popular. Reits offer many of the same benefits of direct property investment but without the problems.
A Reit is basically a company that owns a portfolio of income-producing real estate that provides investors with the opportunity to own valuable real estate for as little as the price of a share.