Here are some pros and cons to weigh if you're thinking about direct property ownership in Manhattan, such as buying an investment condo or building vs. investing in a real estate investment trust such as Boston Properties ( BXP), SL Green Realty ( SLG) or Vornado Realty Trust ( VNO) that own commercial properties in the area. No. 1, Liquidity: REIT wins. REITs are liquid and can be bought or sold with the click of a mouse. That's not the case with direct ownership in a condo or building because it takes at least three months to buy or sell. No. 2, Entry level: REIT wins The capital requirement for REITs is as low as $100. But to own a Manhattan condo, the entry price point is about $500,000. With a 30% down payment, the capital requirement is at least $150,000 excluding transaction costs. No. 3, Leverage: Direct wins Direct property ownership benefits from the power of leverage. If a property appreciates by 10% but the property is purchased with 80% debt and 20% equity, the return on that 10% is magnified to about 50% before transaction costs (10% appreciation/20% equity). While the 10% is based on the total price of the property, the equity the investor actually puts into the property is just a fraction of the total property value. By comparison, if a REIT appreciates 10%, the return is just 10% as the REIT investor typically does not use leverage. No. 4, Control: Direct wins The property owner controls how well the property performs. For example, he can renovate the property to justify higher rents. The flip side is that the landlord has to deal with headaches associated with property ownership. With REITs, the investor is passive and has no control.