Here are ten general reasons why they might not be a suitable investment for most individuals:
1. Lack of Liquidity: Non-traded REITs typically lack a liquid market, making it difficult to sell shares quickly or at a fair market price.
2. High Fees and Expenses: They often come with higher fees, including upfront sales commissions, management fees, and other expenses, which can erode potential returns.
3. Valuation Challenges: The valuation of non-traded REITs can be opaque and complex, making it challenging for investors to determine the true value of their investment.
4. Limited Transparency: These investments might lack transparency in terms of their underlying assets and financial performance, leaving investors with less information to make informed decisions.
5. Long Lock-Up Periods: Investors might be locked into their investment for several years before an exit option becomes available, restricting their access to capital.
6. Uncertain Income and Distributions: Non-traded REITs might offer irregular or unpredictable income distributions, which can be challenging for retirees relying on consistent cash flow.
7. Volatile Performance: Non-traded REITs can be subject to fluctuations in property values and market conditions, potentially leading to volatile performance.
8. Interest Rate Sensitivity: They can be sensitive to changes in interest rates, which may negatively impact their returns, especially in a rising rate environment.
9. Potential for Conflicts of Interest: There might be conflicts of interest between the REIT's management and investors, affecting decision-making and potentially harming investor returns.
10. Tax Complications: Non-traded REITs can have complex tax implications, including the potential for higher taxes compared to other investment options.
For retirees specifically, here are three additional reasons:
1. Income Reliability Concerns: Retirees often seek stable and predictable income streams, which might be uncertain or inconsistent with non-traded REITs.
2. Limited Time Horizon: Retirees may have a shorter investment horizon, and non-traded REITs often require a long-term commitment, which might not align with their financial goals.
3. Increased Need for Liquidity: Retirees might have higher unexpected expenses or healthcare costs, making access to liquid funds more critical, a need that non-traded REITs may not fulfill easily.
What is The Paul Truesdell Podcast?
The Paul Truesdell Podcast
Welcome to the Paul Truesdell Podcast. Two Pauls in a pod. Featuring Paul the Elder and Paul the Younger. So, what's the gig? Individually or collectively, Paul and Paul sit down and chat predominately at the Truesdell Professional Building and record frequently. They explain a few things about how life works before time gets away. They connect the dots and plot the knots, spots, and ops with a heavy dose of knocks, mocks, pots, rocks, socks, and mops. Confused? Then welcome aboard! You see, Paul the Elder and Paul the Younger enjoy telling complex stories that are always based on business, economics, and forecasting while having fun, laughing, and being among like-minded men, women, and children from Earth, Pluto, Jupiter, and Neptune. Individually and jointly, Paul the Elder and Paul the Younger, coupled with Team Truesdell, have been there and done it. If you enjoy front porch philosophers who take deep dives and connect the dots, while drinking coffee during the day and a whiskey after five, welcome.
It is a true pleasure to have you onboard.
This is, The Paul Truesdell Podcast.