Stock Market Analysis and Personal Finance Mr. Bernstein Real Estate Investment, pp 352-360 April 30, 2013

Stock Market Analysis & Personal Finance Mr. Bernstein Direct Real Estate Investments Purchase of legal title to property Is your home an investment? Can a vacation home be an investment? Rental units – duplexes, storefronts, apartments, etc. The US Government offers tax incentives to purchase many types of real estate

Stock Market Analysis & Personal Finance Mr. Bernstein Indirect Real Estate Investments Limited Partnership (no longer carries former tax advantages) REITs Profits from Real Estate operations flow through to holders pre-tax Often pools of investors and diversified portfolio of assets Often trade on an exchange like a stock or ETF

Stock Market Analysis & Personal Finance Mr. Bernstein Advantages and Disadvantages of Real Estate (+) In theory, will rise with inflation (+) You may have personal information about properties that most potential investors do not (+) Indirect investments provide diversification and limited liability (+) Lenders allow considerable leverage – 50-75% not uncommon (+) May reduce risk of overall portfolio (-) Direct investments are illiquid