Why Should You Invest in Real Estate Investment Trust (REIT)?

US Investment Advisor | Raleigh Investment Consultant, LLC

REIT stands for Real Estate Investment Trust. Equity REITs are relatively new financial innovations that were created to make it easier for individuals to gain exposure to real estate Investments. REITs are different than owning a physical real estate property, only much more convenient, easier, can provide dividend income and liquid.

Traditional real estate investors typically need a lot of money to invest in commercial real estate. Real estate is typically owned by partnerships and only by certain types of investors with a lot of capital. As a result, accessing the real estate market was difficult for most investors. This changed in 1960 when President Eisenhower signed a law creating REITs.

REITs have democratized real estate investing and made it easier for individuals to gain exposure to investments in real estate. A REIT is a type of a company or more accurately a trust that invests in a portfolio of real estates. Investors participate in real estate by buying shares of a REIT. Because equity REITs are publicly traded and they are listed on the exchanges like other companies, buying or selling a REIT is similar to buying a stock. This can be done online using the investors’ brokerage account.

REITs can focus on specific types of real estate investments, such as office buildings, hotels, and other real property. For example, XYZ Strip Malls REITs can own commercial real estate, particularly strip malls across the United States. By purchasing a share in the XYZ REIT an investor is able to participate in the profits or losses generated from this portfolio. The part of XYZ’s business is also making sure the strip malls are maintained, managed, and occupied. This eliminates the hassle on the investor’s part compared to owning physical property. REITs can provide dividends when the company performs well. However, they are not always guaranteed to perform well, and providing steady dividends faces several challenges, such as building and expanding a portfolio of Investments.

How REITs work

Because equity REITs are publicly traded they follow supply and demand dynamics of price. Therefore it is easy to identify a good and bad performing REIT, especially when investors use an investment strategy.

To learn more about how REITs can help diversify your portfolio please visit US Investment Advisor.

US Investment Advisor | Raleigh Investment Consultant, LLC

Delivering comprehensive investment advisory and educational services across the U.S.

Independent, Fee-Only, Fiduciary

Call: 919-373-5454


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