REIT vs Direct Property Calculator
Compare investing in a listed property fund against buying a property directly, after transaction costs, fund charges and management time.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →Listed property funds and direct ownership give exposure to the same asset class through very different structures. A fund costs an annual charge and almost no effort; a building costs several percent to buy and sell, plus real management time.
Over short holds the transaction costs dominate and the fund usually wins. Over long ones the annual charge compounds and direct ownership catches up. This shows where the crossover falls for your own numbers.
The comparison
Direct ownership loses the buying costs up front, compounds at the property return, loses the selling costs at the end, and has the value of your management time deducted. The fund compounds at its return less the annual charge, with no transaction costs and no time.
Worked example
Investing 100,000 for ten years at a 7% return on both sides. Direct: 5% buying costs leave 95,000 working, growing to 186,879, less 3% selling costs is 181,273, less 40 hours a year at 40 an hour for ten years — 16,000 — gives 165,273. The fund at 7% less a 0.6% charge compounds at 6.4% and reaches 185,959. The fund is ahead by 20,686 on identical gross returns.
What the model leaves out
Leverage, which direct ownership allows and funds already embed at their own level; control over the specific asset; and the fact that listed funds move with equity markets in the short term while a building does not. Those are real differences the arithmetic cannot capture.
Turn a calculation into an enquiry
Buyers who run these numbers are ready to talk. Give every listing its own page with your photo, phone and WhatsApp on it — leads land straight on your phone.
Create your free property pageFrequently asked questions
Why does the fund usually win on equal returns?
Because direct property pays several percent to buy and sell and consumes your time, while a fund pays a fraction of a percent a year and none. Direct ownership has to outperform to make up that gap.
Does that make direct property a bad idea?
No — it means direct ownership needs an edge: leverage, buying below market, improving the asset, or a return the listed market does not offer. Buying at market price with no leverage is where the comparison bites hardest.
Should I value my own time?
If you have an alternative use for it, yes. Managing a property is real work, and treating it as free is how people conclude that direct ownership beats a fund when it does not.