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No. of Recommendations: 13
While individually owned real estate may have significant advantages, there are disadvantages as well.

Lack of diversification at the property and tenant levels.

1) at the property level, if the local economy declines, or even just gets overbuilt, returns will suffer.

2) Tenant diversification. Back when I was a loan officer I probably dealt with 10-12 real estate investors, only two did really well, 2-3 did ok and the rest did poorly, all in pretty much a single real estate market. One of the two that did really well was a master at screening tenants, one bad tenant can takes years of profits.

3) As previously mentioned there are hassles in directly running a business or rental properties.
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