Overview of Types of Real Estate Investment

Correct Answer: Higher liquidity due to the ability to trade REIT shares on public exchanges

The key advantage of investing in REITs compared to direct real estate investments is higher liquidity. REIT shares can be easily traded on public exchanges, providing investors with greater flexibility to buy and sell their investments as needed. Lower management fees and greater control over property management decisions are not advantages of REITs. In fact, REITs typically have higher management fees than direct real estate investments due to their corporate structure and professional management. Additionally, REIT investors have less control over property-specific decisions, as these are made by the REIT's management team.

Correct Answer: Precious metals

The correct answer is "Precious metals". Precious metals, such as gold, silver, and platinum, are not typically considered a major sector within the real estate market. Real estate primarily deals with properties and land, whereas precious metals are commodities that are traded on financial markets. Residential properties, including single-family homes and multi-family units, are a major sector in the real estate market. These properties are used for housing and are often the focus of real estate investors and homebuyers. Commercial properties, such as office buildings, retail spaces, and industrial facilities, are another significant sector in the real estate market. These properties are used for business purposes and generate income through rent or lease payments.

Correct Answer: Purchasing a rental property and managing it personally

Purchasing a rental property and managing it personally is an example of a direct real estate investment. Investing in a REIT or buying shares of a publicly-traded real estate development company are indirect real estate investments, as they involve investing in a company or trust that owns and manages real estate properties, rather than directly owning and managing the properties yourself. Direct real estate investments involve the investor taking an active role in the ownership and management of the property, while indirect investments allow the investor to participate in the real estate market passively through a third party.