Things You Should Know About REITs

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Things You Should Know About REITs
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REAL ESTATE INVESTMENT TRUST (REITs)

• Lets start with a simple REIT definition. A REIT
  is a real estate investment trust. A REIT is a
  fund that pools investor money toward a property
  or collection of properties. REITs can vary in
  size and portfolio makeup, but lets consider a
  pretty straightforward example. A REIT may fund a
  few self-storage locations across a number of
  cities. The company then collects revenue from
  customers renting space in the self-storage
  facility, and that revenue is then distributed
  among investors, often in the form of dividends.
• Real estate investment trust (REITs) is a key
  consideration when building any equity or
  fixed-income portfolio. They provide potentially
  higher total returns, lower overall risk, and
  greater diversification. In short, their ability
  to generate dividend income, coupled with capital
  appreciation, makes them a good balance of
  stocks, cash, and bonds. Keep reading to learn
  things you need to know about Real Estate
  Investment Trust.

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DIFFERENT TYPES OF REIT

• Residential A real estate investment fund that
  owns and manages completed homes and rental
  condos.
• Retail These real estate investment funds
  require at least 24 of their assets to be
  invested in retail businesses such as malls and
  independent retail stores.
• Healthcare These trust funds primarily invest
  and manage healthcare-focused real estates such
  as hospitals, retirement homes, nursing homes,
  and medical centers.
• Mortgage For these real estate mutual funds, it
  is estimated that 10 of the investment is spent
  on mortgages rather than real estate.
• Office These real estate investment trust funds
  primarily invest and manage offices. Therefore,
  the primary source of income for this type of
  real estate investment fund is the rent obtained
  from tenants with long-term lease rights.

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HOW TO INVEST AND MAKE MONEY?

• When real estate investment trusts are listed on
  major stock exchanges, investors can buy stocks
  quickly as other public stocks. Most real estate
  investment trusts listed on public stocks are
  REITs.
• Investors can also invest in mutual fund REITs or
  exchange-traded funds (REITs or ETF). That allows
  investors to buy a range of stocks in the entire
  REIT index. You can also buy private real estate
  investment trusts and non-trading public REITs.
  However, it is more complicated. Such investments
  are usually limited to institutions and
  individuals that meet specific financial
  standards.
• Generally, real estate investment trust funds
  follow a simple business model. The company
  purchases or develops real estate whose primary
  source of income is rent. The income produced by
  the company is paid to shareholders in the form
  of dividends. Real estate investment trusts can
  also make money by buying and selling real estate.

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INVESTING ADVANTAGES

• Real Estate Investment Trust Investment brings
  multiple benefits to investors. They offer the
  benefits of real estate investing, but with the
  convenience and simplicity of investing
  in publicly traded stocks. As mentioned above,
  REITs have nothing to do with other stocks or
  bonds, so they also provide diversified
  investments. They also offer higher risk-adjusted
  returns and effectively reduce the overall
  volatility of the investment portfolio.
• However, some real estate investment trusts do
  not own real estate but choose to raise funds for
  real estate transactions. These REITs generate
  interest income by raising funds. Mortgage real
  estate investment trusts are one of the REITs
  that do not own real estate.

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OVERVIEW

• Based on mutual funds, Real estate investment
  trust has always provided a normal source of
  income, long-term capital valuation, and
  diversified investment for all types of
  investors. Investors can buy stock in equity and
  mortgage stocks. Equity REITs own real estate in
  various real estate sectors, including office,
  retail, and residential.
• Real estate investment trusts also offer
  investors consistent and reliable dividend
  payment benefits. In addition, their long-term
  performance is outstanding as the total return of
  REITs has outperformed the over the past 25
  years. Finally, real estate mutual funds are
  highly liquid, which usually excludes the risk of
  illiquidity associated with real estate investing.

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THANK YOU
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