Private REIT vs Public REIT for Passive Real Estate Income

 

Four-panel comic titled 'Private REIT vs Public REIT'. Panel 1: A man and woman discuss REITs offering passive income. Panel 2: A woman explains private REITs are for accredited investors. Panel 3: Two people mention public REITs are traded on stock exchanges. Panel 4: An older man advises to consider risks, returns, and transparency.">

Private REIT vs Public REIT for Passive Real Estate Income

Looking to generate passive income through real estate without the hassle of direct property ownership?

REITs—Real Estate Investment Trusts—offer a streamlined way to gain real estate exposure while enjoying potential dividends and capital appreciation.

But not all REITs are created equal.

In this post, we compare Private vs Public REITs to help you make smarter income-generating investment decisions.

πŸ“Œ Table of Contents

🏒 What Are REITs?

REITs are companies that own, operate, or finance income-producing real estate across various sectors such as commercial, residential, healthcare, or logistics.

By law, they must distribute at least 90% of taxable income to shareholders as dividends.

This makes them especially appealing for passive income seekers.

πŸ”’ What Is a Private REIT?

Private REITs are not listed on public exchanges and are typically offered to accredited investors.

They often require higher minimum investments and have limited liquidity, meaning you may not be able to sell quickly.

However, they may offer higher returns due to access to niche or off-market real estate opportunities.

Private REITs are generally exempt from SEC registration, which means lower regulatory burden—but also less transparency.

πŸ“ˆ What Is a Public REIT?

Public REITs are traded on stock exchanges like the NYSE or NASDAQ and are open to all investors.

They offer high liquidity, transparency, and regulatory oversight, making them suitable for most portfolios.

Yields may be lower compared to private REITs due to wider investor access and market pricing, but the ability to buy or sell instantly is a major plus.

πŸ“Š Key Comparison: Private vs Public REITs

Here’s a side-by-side breakdown:

Liquidity: Public REITs are highly liquid; private REITs are not.

Access: Public REITs for everyone; private REITs often require accreditation and high minimums.

Transparency: Public REITs file with the SEC; private ones don’t.

Fees: Private REITs may charge higher fees (management, performance, etc.).

Return Potential: Private REITs may outperform—but with greater risk and less flexibility.

The right choice depends on your goals, timeline, and risk appetite.

πŸ“Ž Related Resources

Dive deeper into REIT-based income strategies and structure types with the links below:

Compare structured products to REITs for passive yield strategies.

Learn how to align your monthly budget with predictable dividend payouts.

Use financial tools to forecast income and risk scenarios.

Discover how REITs can be included in legacy wealth strategies.

Leverage REIT dividends in charitable lead trust structures for dual-purpose planning.

Keywords: private REIT vs public REIT, passive real estate income, REIT investment strategy, accredited investor REITs, real estate dividends