Real Estate Investment Trusts
Why should you invest in REITs?
There are a number of ways in which Real Estate Investment Trusts may prove to be beneficial. Among the reasons to consider investing in REITS are: REITs are total return investments. They will get you high dividends plus the potential for moderate and long-term capital appreciation. The long-term total returns of REIT stocks are less than the returns of higher risk high-growth stocks but more than the returns of lower risk bonds.
- REIT is a great option for you to invest in commercial and residential real estate businesses. It distributes 90% of its income amongst its investors and brings you the best of real estates and stocks.
- Real Estate Investment Trusts (REITs) are tax provisions that reduce or completely get rid of corporate income taxes for corporations investing in real estate.
- REIT provides a similar structure for investments in real estate as mutual funds do for investment in stocks.
- With REITs you get a steady flow of dividend income, high dividend yields, portfolio diversification which cuts down risk and much more.
- You can easily turn shares of publicly traded REITs into cash as they are traded on major stock exchanges.
If you want to include a professionally-managed real estate in a diversified investment portfolio, go for it!
What exactly are REITs?
Real Estate Investment Trusts (REITs) are organizations that combine the capital of many investors to acquire or finance all kinds of real estate, such as offices, hotels, shopping centers, or apartments. A REIT is a little like a mutual fund. Its portfolio is professionally managed and diversified, holding many properties. REITs typically trade on major stock exchanges.
REIT has two unique features:
- Its primary business is managing groups of income-producing properties
- It must distribute most of its profits as dividends.