Quoting Munger - "By its nature, real estate tends to be a very lousy investment for people who are taxed under Subchapter C of the code relating to corporations" (like Berkshire)
So Berkshire's shunning of real estate and REITS might be primarily due to this tax aspect. For individual investors who are not taxed like a Subchapter C corporation, there wouldn't be the tax disadvantages. But Buffett also points out that mispricing of real estate is fairly rare, making it harder to find the bargain valuations that he looks for.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.