What are the pros & cons of buying REITs as opposed to physical properties?

Pros: Your dividends from REITS is not taxable.

You can have a diversified portfolio compared to.. whats the most number of property you can own now?

You can start with a small sum: $200? $500?

The costs of managing properties are largely tied to economics of scale, REITS save you money.

You don't need to manage those properties on your own.

CONS:

so much harder to sell a course teaching pple how to buy reits compared to "how to buy 34 properties with no money"

Pros:

• Higher yields at current market conditions
• Ease of Research due to publicly available financials
• Generally lower leverage than buying a single property
• More diversification as you are buying a portfolio of properties over a single property
• Lower capital requirements as you can get started on REITs for below $300
• More liquid as you can buy and sell as and when the market is open
• No property management headaches like maintenance and repairs, looking for tenants, etc.
• Income tax advantage as REIT distributions are not taxed on individuals, while rental income does.
• These pros are summarised in my article here.

Cons:

• Hard to find bargains due to ease of research
• Potential bad REIT managers. There are good REIT managers and there are bad REIT managers. It takes time to analyse management behaviour to see who falls within which category
• Potential capital raises through rights issues may come at a time when you have no extra cash on hand