Tuesday, November 3, 2009

REITs – Going to the Head of the Real Estate Investing Pack

REITs are quickly gaining popularity with real estate investors. In the world of real estate investing there are two kinds of people, those who see a profit and those that don't. Everyone wants to be a part of the first group, but few really know how to do it.

If you are to be successful with investing, you need to take a few lessons from the big dogs. After all, they got to where they are through years of hard work and investing. They are the experts; they make great role models.

The first thing you need to know is where to invest your money. There are many money moguls who will tell you they made their fortune in real estate.

Look at Donald Trump; his whole career was made on the right real estate moves at the right time. One thing to consider is that real estate is an asset, not a fluid commodity that could disappear overnight. What happens during a market downturn? Warren Buffet once said, "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." Can you say that about your other holdings? If you have real estate in your investment portfolio, you probably could, as real estate is something that will still have value.

For many people who are accustomed to the more traditional types of investments, they are not really sure where to start when it comes to investing in real estate. Do you have to buy a piece of property? A house? An apartment complex? The answer is no. You don’t have to do any of those things. Purchasing property outright, while still a nice investment, is a much more difficult venture than most people want to attempt. With REITs, the investor owns a part of a fund, with something as liquid as a stock, without having to deal with all the paperwork, responsibility and liability exposure of a property owner.

This is why you should be looking at REITs. REITs are Real Estate Investment Trusts. Essentially these are the mutual funds of real estate. When you purchase shares in REITs you are putting money into a fund for a real estate management or development group to build or purchase real estate which they manage and operate.

Your profits are paid to you as dividends from the income produced by the property. From rent in residential properties to leases of business properties, 90 percent of the profits from REIT investments must go back to the shareholders in the form of dividends each year.

Beginning investing in REITs is simple; you just need to know where to look. A website like REITBuyer.com is a great resource for investors to learn about REITs and see how they are performing. They are also are a full service investing real estate broker that you can purchase your REITs through.


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