Investing in REITs – Real Estate with Liquidity

Investing in REITs means owning real estate with liquidity: As many people these days are finding out while real estate seems like a wonderful investment, it can also be a painful one if your investment was in a piece of property that you own outright. Many people who had purchased investment properties or homes they were planning to flip for a profit were sent into bankruptcy in the recent housing market crash.

With that said, real estate has long been the solid investment option for those who like to put their money somewhere that it can see results but also remain stable.

So, how does one be able to still be involved in the real estate market and not be caught in that same trap? The answer is by purchasing REITs. A REIT is a real estate investment trust. This means it is much like a mutual fund in that a number of shareholders put money into the fund and that money is used to purchase, finance or manage real estate properties. The profits on the fund then come from mortgage interest, rent or lease moneys that come in.

For the most part a return on REITs averages 6-10%. U.S law dictates that 90% or more of the profits on a REIT go to the shareholders, and that makes them a pretty strong investment option.

The short version of what a REIT is, is a way to be a partial owner in real estate.

But with this said, one of the things that many people fear about real estate, being stuck with a property that will not sell in a down market, is not a problem here. Instead, REITs are totally liquid. If you think things are not going to go well in the future of your REIT, you can sell and get out and then put your money back in when things are looking up again. If you do this right, just this can be a big profit maker for you as you will be pulling your money out when the REIT is high and then putting it back in, and getting more shares, when the market is low.

If you are one of those people that think there's no way to know when the market will do well or fail and that it's all luck, that's not necessarily true. As Smith Barney said, "There's blind luck, dumb luck and then there's get up every morning at 5:30 and sweat the details luck. Few people actually stumble into wealth. It takes persistence, tenacity and a tireless work ethic. In the end, luck has little to do with success."

This is also the case here, by doing your own research and keeping on top of the market you will be able to make wise investing decisions. With the help of REITBuyer.com you will be able to do this. REITBuyer.com has all the tools and resources you need to make wise decisions about investing in REITs. The added benefit by being a part of REITBuyer.com is that not only will you have that information at your fingertips, but also the ability to buy and sell your REITs as they are an investing real estate broker.

Investing in REITs to Hedge the Stock and Bond Markets

Investing in REITs - Have you taken a look at your investment portfolio lately? If you have, and it's filled with the normal stock and bond investments, you may have noticed that there has been a lot of damage to those investments in the past year or so. With the credit crunch and the market crash, most investments are half, or less, of what they should be.

This is when you should consider what you should be doing to hedge those other investments. This is where REITs come in.

REITs are Real Estate Investment Trusts. These are funds where you fund a real estate management company. There are a variety of REITs out there. Some offer a way to back real estate developers who are taking on new ventures in construction. Others are meant to fund management of residential real estate such as apartment complexes, condominiums or even neighborhoods. Still others use the funds put into the REIT to operate commercial real estate interests.

I think Louis J. Glickman said it best when he said, "The best investment on earth is earth.” Real estate is always a wise investment. No matter what happens the land will always be there. Sure it may waiver in value from time to time, but in the long run, it will always be around, unlike businesses that can close their doors and take your investments down with them.

With this said, adding a REIT or two to your portfolio it would offer you a little more diversity and security in your investments.

You never know what the stock market will do. Just in the past few decades we have seen a number of sweeping changes in the market that completely broke some investors. Think of how many people you know who went bust during the Doc.com era.

Often the problem for them was they were too focused on the flavor of the month. They were putting everything they had into the new Dot.coms hoping to continue to ride the boom and make great profits. While they did see some great profits, those did not last forever. For those who kept putting everything they had into the doc.com market, they felt the agony of defeat in a major way when the market fell, many losing everything they had.

While there is nothing wrong with trying to jump in on an up and coming thing and make a great profit, it comes down to the old 'all your eggs in one basket' cliché. You don't want to have everything hedging on one investment. Instead have a diverse portfolio so if there is a drop in one area, you have other investments hedged against it.

In this case, even when there is a drop in the stock market and mutual funds, real estate usually will hold pretty strong through the down times, keeping you from feeling that all of your investments have been swept away.

When you're ready to take a step towards diversity, consider investing in REITs. Going to a website like ReitBuyer.com will help you do just that. They will not only give you the research and information you need to buy wisely, but they are also real estate brokers for these investments and can help you seal the deal.