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Owning REIT vs owning real estate - which has a better hypothetical ROI?
You've already hit on the big difference. If you buy a property, you've made a big commitment, for better or worse.  If you bought wisely, you'll be very happy.  If not, you could go bankrupt. An REIT spreads out the risk, but the reward isn't as great. There's less barrier to entry in buying shares of an REIT than there is in buying an investment property:  money, time, maintenance. The answer for you depends on what level of effort you want to put into your investment.  If you are all ready to pick up an investment property, make the down payment, get appraisal and inspection, clean up the house, and fill it with tenants, then go for it.  Otherwise, research some REITs and buy some shares. (Disclaimer:  I have a rental property that's doing pretty well now.)