Well, there’s a way, and it was around for quite a long time. It’s called a Real Estate Investment Trust, or REIT. A Real Estate Investment Trust is a means for the small investor to invest in big real estate. A Real Estate Investment Trust is an organization that is established to manage and invest in real estate professionally. You can purchase a Real Estate Investment Trust (REIT) via the stock exchange in the shape of a stock, or privately. Private Real Estate Investment Trusts typically require that certain suitability criteria be met. Also, private REITs are typically longer-term investments, with liquidity considerations. Public Real Estate Investment Trusts can be bought and sold on the stock exchange and are far more liquid than their private counterparts.
Investing in a Real Estate Investment Trust can come in many forms. You can purchase a Real Estate Investment Trust that focuses on large-scale commercial real estate, for example. This would allow you to participate in the major real estate deals involving 100 plus story buildings, that would normally be available to the ultra rich. Some Real Estate Investment Trusts may have their focus in apartment buildings or even new housing construction. The point here is that you will be able to choose your Real Estate Investment Trust sector through one of these REITs. If you want a more professionally managed approach there are a great number of REITs actively managed through the acquisition of mutual funds. This can provide for diversification, and individual real estate sectors.
Notwithstanding the following …
Properly set up Real Estate Investment Trusts are tax-advantaged. This means that they’re not taxed at the corporate level. However, they must be established up properly. It is required that REITs invest 75 percent of their funds in real estate. These requirements are covered by income derived from mortgage or rent interest. Essentially, you are relying on other parties for their experience in the real estate arena. Going at it alone is tougher than ever these days. You have the typical headaches, like qualifying for a 1031 exchange, property taxes, escrow, title insurance, and so on. But, that’s really the easy part. When the real estate market only went up, the biggest worry for speculators was how to take benefit of a 1031 exchange and save on capital gains. Now, there is much more to worry about, as real estate not only goes up, but it can certainly come down.
Investigating Real Estate Invest
Be a safe real estate investor. Ensure to make your real estate investment only after considering essential factors and deciding your real estate investment strategy. Get suggestions and advice from experienced and talented real estate investment professionals or from Real estate investor websites before making a real estate investment. Only then you can make a safe real estate investment.
It’s important to remember that Real Estate Investment Trusts also come with inherent risks. If real estate values plummet, and you have a large proportion of your assets exposed to Real Estate Investment Trusts you may experience declines, as well. This is where diversification is very important. The standard Real Estate Investment Trust me diversify you within various types of real estate. However, you should always practice further diversification. Investing in sectors, different asset classes, and the life will provide you with further diversification. Make sure to work in collaboration with a qualified investment advisor or do your due diligence when investing in any kind of Real Estate Investment Trust.