Question

Which of the following is most likely to be an advantage of private direct property ownership vehicles over publicly traded real estate securities like REITs and REOCs?

a) The ability to pass on tax losses to investors.
b) The avoidance of double taxation.
c) Increased liquidity.
d) The ability to diversify across various property types.

Answer 1

Private direct property ownership vehicles offer the advantage of diversifying investments across various property types, reducing risks and potentially increasing returns.

Step-by-step explanation:

The most likely advantage of private direct property ownership vehicles over publicly traded real estate securities like REITs and REOCs is the ability to diversify across various property types. Private direct property ownership allows investors to have full control over their property choices and allocate their investments across different types of properties, such as residential, commercial, or industrial. This diversification strategy can help minimize risks and potentially increase returns.