BiggerPockets Money Podcast · Tuesday, August 11, 2026
A key factor distinguishing REIT performance is the management structure. The speaker argues that internally managed REITs have historically outperformed externally managed ones due to fewer conflicts of interest and better economies of scale. Investors might benefit from favouring internally managed REITs or avoiding externally managed ones when making investment decisions.
“With the external management structure, the management is outsourced to an outside company that takes care of the management in exchange for fees income. And this management structure of the long run has proven to lead to much greater conflicts of interest, lower economies of scale, and as a result of this, all the internally managed REITs have outperformed very significantly the external managed REITs over the long run.”
“By simply avoiding these external managed REITs, you could already do better on average.”