REIT Investing – What is it and how to do it?

3 min read

reit investing

You don’t always need to become the landlord with real estate investments. You have the ability to become a real estate investor without becoming a landlord as well. In order to do that, you just need to take a look at REIT Investing.


Most of the people who live out there in the world consider REIT investments as an excellent addition to the investment portfolio. Let’s deep dive and explore what REIT investments are about. Then you can consider whether you are going forward with this investment opportunity or not.

What exactly are REIT investments?

REIT stands out for Real Estate Investment Trust. It is a company that owns, bankrolls and manages real estate properties, which are generating an income. Rent that is generated from these properties will be shared among the shareholders. This will be done through dividends. Hence, people who go ahead with REIT investments will be able to generate an excellent passive income without any hassle.

The REIT investments are pretty much similar to mutual funds. You will be able to find it being traded in leading market exchanges. Along with REIT investments, investors are provided with the opportunity to put all their money into a pool and then become owners of real estate. Along with that, they will be able to earn money, which they cannot afford on their own.

When you go ahead and get your hands in REITs, you will be able to get a small office building or a silver apartment. This is pretty much similar to owning stock in a company, where you have the ownership for a small piece of the company.

It is recommended for you to go ahead with REIT investments, especially during times where there are low-interest rates. Therefore, you will be able to receive the most amount of money for what you invest at the end of the day. If you go for it during a time where there are high interests, you will have to experience a somewhat bumpy ride.

How to get started with REIT investments?

Now you are aware of what REIT investments are all about. Along with that, let’s take a look at the steps that must be followed to get started with REIT investments.

The REIT stocks are in a position to provide excellent assistance for the investors to go ahead and invest money in real estate. This is pretty much similar to the process of how they are investing money on any other industry. In other words, it is similar to purchasing stocks from a mutual fund. Once you become a REIT shareholder, you will be able to receive a portion of the money that is generated by your investment.

You will not have to pay any corporate taxes when moving forward with REIT investments unless you adhere to all the Congressional guidelines.

At the time of venturing into REIT investments, you will need to have a basic understanding of the different types of REIT investments as well. Then you can pick the perfect investment type according to your preferences and go forward with it.

1. Equity REITs

Equity REITs is the most popular types of REITs available out there for you to invest. That’s because most of the REITs that are traded publicly fall into this category. Equity REITs are operating or holding the ownership of real estate, which produce an income.

2. mREITs

Mortgage REIT is the second type of REIT investment available to consider. They are in a position to offer finances for the real estate that generate an income by originating or purchasing mortgages along with mortgage-backed securities. Then you will be able to earn money via the interest generated by the investments.

3. Private REITs

Private REITs are the ones, which you cannot find in the SEC registration. In here, the shares aren’t being traded within the national stock exchange.

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4. Public non-listed REIT

The public non-listed REITs are registered with SEC. However, you will not be able to find them being traded within the national stock exchange.

When you compare these different types of REITs, you will be able to get a better understanding of what option is the best for you to proceed with. Along with that, you can start spending your money in order to secure the REIT investment. This is where you will need to get the assistance of a financial planner, investment advisor or a broker. They will use their expert knowledge in order to determine the end objective you have as an investor. Then you will be provided with the most appropriate REIT investment opportunity out there.

In here, you should also keep in mind that you have the chance to go ahead and invest in private REITs and public non-listed REITs as well. You can discuss with your investment planner and then get additional information.

Should you go ahead with REIT investments?

The dividend income generated by REIT investment opportunities has transformed it into an excellent investment opportunity. Therefore, you will be able to go ahead with this investment opportunity without keeping any doubts in mind. You are provided with the chance to treat it as an excellent passive income. That’s because you will be able to secure a decent amount of money without spending any time or effort at all.

From recent studies, it has been identified that most of the retired people tend to go ahead with the REIT investments. That’s because it can provide a great passive income source. Even if you are a person who has a packed schedule, you can think about investing your money on REIT. It is a great opportunity available for you to diversify the overall investment portfolio. Along with that, you will be able to receive excellent results at the end of the day. Hence, you must take a look at REIT investments and go forward with it.

Great video on REIT investing

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