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Why Private Real Estate Investing Beats Publicly Traded REITs

10/08/15 5:01 PM EDT
The U.S. Census Bureau says 40 million Americans are past the traditional retirement age and that figure is expected to double over the next few decades. Ajay Gupta, CEO of Gupta Wealth Management, said he sees an investing opportunity in that demographic inevitability. 'All of these older people are going to need somewhere to live,' said Gupta. 'The supply is not keeping up with number of people turning 65 every single day.' Gupta said he avoids highly leveraged development deals in favor of more stable, higher-quality, long-term investments like privately owned apartment buildings or assisted living facilities. He said there has been a steady increase in occupancy and rents, but a limited supply of new inventory, due to a severe contraction in construction lending caused by the credit crisis. 'I also look for opportunities that allow my clients to co-invest alongside some of the biggest family offices and senior housing operators in the country,' said Gupta. 'Becoming a minority investor in these real estate portfolios allows our clients to take advantage of the deep pockets, expertise and scalability of those already in the space.' Gupta added that his investors also enjoy the benefits of investing in real estate including tax deferral, the 1031 exchange potential and the depreciation of rental income. He said his investors generate yield of approximately 7% in these investments.
Stocks in this video: IYR
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