Make Money In Real Estate Investment Trusts

Make Money with Real Estate Investment Trust, REITs

Make money with Real Estate Investment Trusts without the risks of the stock market.  REITs are investment pools.  The REITs allow many investors to pool their money together and invest in real estate. The person or the organization that controls the REITs is called a Trustee.  The Trustee’s goals and objectives are to make money for the Investors.

Key Takeaways:

• Diversification of your investment portfolio
• REITs invest directly in properties, earning rental income and management fees. 
• Some REITs invest in real estate debt, like mortgages and mortgage-backed securities.
• REITs tend to focus on a sector of properties, such as retail, shopping centers, hotels & resorts, or healthcare & hospitals.

How to Invest in REITs

There are many types of REITs.  Below is a summary of what they are.

Retail REITs

Retail REIT invests in retail locations like shopping centers, strip malls, and other retail centers.

Residential REITs

Residential REIT invests in residential housing including single-family homes, apartments, condos, high-rise condotel, and luxury residential properties.  This type of REIT will collect rents from renters and collect management fees. 

Healthcare REITs

Healthcare REIT invests in doctor offices, hospitals, emergency centers, and other healthcare-related properties. 

Office REITs

Office REIT invests in office buildings, high-rises office buildings, and other office buildings. 

Mortgage REITs

Mortgage REIT invests in secured mortgages (home loans). 

Historical returns of REITs

Real estate investment trusts perform the best in their asset class. Investors use the FTSE NAREIT Equity Index to measure their performances from the 90s to the early 2000s in the US market. The REIT return on investments is over 9 percent a year. 

Investment activities do REITs 

REITs majorly focus on long-term investments instead of buying and selling properties to earn small profits. It is one of the Best Realtor in Fountain Valley, CA.  If you are interested in earning money in real estate through Real Estate Investment Trusts then you can do that by earning dividends over some time. 

Minimum REIT Investment

Make money with real estate investment trust by putting in a minimum investment. Whether you have money or not for investment, you can buy real estate through REITs. The entry cost of investing in REIT is very low so you may be asked to invest as low as $500 or just the price of one share.

Advantages of Investing in REITs

The best thing about investing through REIT is that you free yourself from managing the property as a landlord do. When you see that the company is going up in value, you can opt to sell your shares to earn profits. The success of that company will decide the amount of profit you will earn through your REIT shares.

REITs allow you to begin your investment in real estate without actually owning real estate. So, do you think REITs is a good investment option? 

Where do I begin investing in REIT?

You can begin investing in REITs but they can be complex. Some REITs aren’t traded publicly. There can be certain risk factors investing in REITs.

The type of REITs you invest in, play a big role in determining the risk level. There are non-traded REITs in the market and if you purchase those, it may be hard for you to earn profits. If you are new to this industry, then you should start with publicly-traded REITs, which can be purchased from your brokerage. 

Real Estate Agent

Your real estate agent cannot help you with buying and selling shares of stocks.  Your agent can help you with understanding the overall market so that you can pick the right REIT to buy.  For example, during the pandemic, the retail real estate business has been decimated in some areas, and in other areas they are fine.

It’s important to understand why so that you can make the right decision. Say, for example, it’s not a good time to touch Retail Real Estate but it’s a good time for residential in some areas. 

Who should invest in REITs?

So you have done your home buying checklist, got your mortgage, and have gotten yours by following the 10 Steps of Finding the Best Realtor in Fountain Valley.  Now you have a great job and you have extra money after all your expenses.  You don’t want to put all your eggs in one basket.  And you don’t want to deal with renters.  The stock is too risky for you but you are willing to assume some risks. REITs are for you.  

Final Words

The most important thing is to understand the strategy you are adopting to earn money from your investment. You have to analyze the investment options and risks factors before jumping into this puddle.