Are REITs a Good Investment?
We hear this question a lot. Part of the reason we're hearing it may be because of the tough patch the economy has had lately. Another part of the problem may be because people are just not sure of what they are and why they should buy into them. Here's a quick look at both of these topics.
What is a REIT? A REIT is a real estate investment trust. This is essentially a fund that supports real estate construction or real estate management. Basically, if you purchase shares in a REIT, that money will go into a pot that will be used to buy, build, manage and maintain real estate investments.
How do you make money? Once you have purchased a share in a REIT, at least 90 percent of the profits that are made by that REIT go right back into the hands of the investors in the form of dividends. Think of this as stock market dividends but getting a higher percentage back from profits than you ever would with other stocks, bonds and mutual funds.
Why should you buy in to a REIT? This answer is simple. Real estate is considered the strong steady market. Even when the rest of the market is crumbling, it usually keeps a pretty good foothold on things. Part of the reason for this is that real estate is an asset, and a tangible one. While values may fluctuate, property always is worth something.
For example, many real estate investment trusts have seen returns of 6-60 percent, which is as good if not better than stocks and other investing funds. So, if you know when and where to buy, there is a chance to make a lot of money.
But what about the bad economy? This is a question a lot of people are asking. They are worried that if they get into purchasing REITs now they are going to lose more money if the market tumbles again. While that could happen, the chances are that even if there were another downturn, your investment would still be pretty stable. Remember, you are still working with a tangible investment of property.
It is also interesting to know that REITs are interesting enough to get the attention of some of the major private firms such as Tishman Speyer Properties. This shows not just small investors are interested in this type of investing.
Getting into the REIT market is not that difficult. It takes little more than some time to get yourself acclimated and then learn about what it is you want to buy before you make a purchase. Start by logging onto REITBuyer.com. The site is chock full of all the information you need to learn about REITs and study the past performance of many REITs as well as get a good idea of the future possibilities. Once you are ready to buy, they are also a full service investing real estate broker that can complete that transaction in the same place.
Sunday, March 8, 2009
Wednesday, February 25, 2009
What to Know About REIT- If the Prime Interest Is Not Making You Happy
REITS: Real Estate Investments to See Real Profits
Many investors say they want two things in their investments – a return on their money and some security that their money will not be here today and gone tomorrow. When it comes to trading on the stock market or purchasing mutual funds, those are usually two things that cannot be promised. When you purchase stocks, you never know if the company is going to have a bad quarter, losing you a chunk of your investment or if they are going to fail altogether, taking your money with them.
The only place you can really be sure that you will not lose everything in a bad session is in real estate.
Even if the bottom falls out of the real estate market, real estate that has been purchased is an asset. So, while there may be losses in a major downturn, you won't lose everything. Often in this case if you were to hold on for a little while and be patient it will all bounce back and you'll be seeing dividends come in again like nothing ever happened.
There are two ways to invest in real estate. The first is to make a real estate purchase. For the most part this means having a lot of money in hand to be able to buy a piece of property or a building outright. For most people this is not a possibility as this means having tens to hundreds of thousands of dollars in hand to invest.
There is another option however. Instead, why not be a part of a real estate investment trust or REIT. A REIT is where you are a shareholder in property ownership. This means you will purchase shares that go into a collective pot that is used to purchase and maintain properties. These properties could be anything from commercial buildings that are being leased out to residential buildings that are rented out.
The way a REIT works is that as the real estate management group makes a profit, that profit will be given to you as a dividend. Laws dictate that at least 90 percent of the profits from a REIT have to be returned to the shareholders, so barring a major downturn in the economy you know you will get a return on your investment year after year.
That other 10 percent of the profit from the REIT will go back into the management of the properties or possible improvement or expansions that will give you even more return on your investment dollar in the future.
Unlike regular real estate purchases, there is another benefit to REITs. If you ever needed to pull some of your money out it is as easy as selling a few shares instead of having to sell a property and go through all those hassles.
Getting into the REIT market is also relatively simple. Just go to REITBuyer.com and you can research the REITs out there and even make your purchases in one stop, as they are an investment real estate broker as well.
Many investors say they want two things in their investments – a return on their money and some security that their money will not be here today and gone tomorrow. When it comes to trading on the stock market or purchasing mutual funds, those are usually two things that cannot be promised. When you purchase stocks, you never know if the company is going to have a bad quarter, losing you a chunk of your investment or if they are going to fail altogether, taking your money with them.
The only place you can really be sure that you will not lose everything in a bad session is in real estate.
Even if the bottom falls out of the real estate market, real estate that has been purchased is an asset. So, while there may be losses in a major downturn, you won't lose everything. Often in this case if you were to hold on for a little while and be patient it will all bounce back and you'll be seeing dividends come in again like nothing ever happened.
There are two ways to invest in real estate. The first is to make a real estate purchase. For the most part this means having a lot of money in hand to be able to buy a piece of property or a building outright. For most people this is not a possibility as this means having tens to hundreds of thousands of dollars in hand to invest.
There is another option however. Instead, why not be a part of a real estate investment trust or REIT. A REIT is where you are a shareholder in property ownership. This means you will purchase shares that go into a collective pot that is used to purchase and maintain properties. These properties could be anything from commercial buildings that are being leased out to residential buildings that are rented out.
The way a REIT works is that as the real estate management group makes a profit, that profit will be given to you as a dividend. Laws dictate that at least 90 percent of the profits from a REIT have to be returned to the shareholders, so barring a major downturn in the economy you know you will get a return on your investment year after year.
That other 10 percent of the profit from the REIT will go back into the management of the properties or possible improvement or expansions that will give you even more return on your investment dollar in the future.
Unlike regular real estate purchases, there is another benefit to REITs. If you ever needed to pull some of your money out it is as easy as selling a few shares instead of having to sell a property and go through all those hassles.
Getting into the REIT market is also relatively simple. Just go to REITBuyer.com and you can research the REITs out there and even make your purchases in one stop, as they are an investment real estate broker as well.
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