REITs come in many different forms, with varying criteria. However, many prospective investors might not understand the differences — and relative pros and cons — between publicly traded REITs and non-traded REITs. The latter category includes both publicly registered non-traded REITs and private REITs.
Liquidity vs. Illiquidity in REITs
Publicly traded REITs are probably the most well-known type. These products offer some exposure to the real estate market through companies that invest in physical real estate assets. Rather than investing in a physical property, investors buy publicly traded shares of a company on an exchange, where pricing is subject to market forces and volatility.