Many people would like to create wealth through real estate but get stone walled by the huge learning curve and abundance of conflicting information. The following is a simple way of cashing in on Real Estate WITHOUT a learning curve and WITHOUT any of the headaches associated with being a land lord, paying property taxes and some of the not so appealing attributes of traditional real estate investing. I am speaking of Real Estate Investment Trusts. Also known as (REIT’S). A real estate investment trust, or REIT, is an unincorporated association of investors who pool their resources to invest in real estate projects and share the associated profits and losses. REITs are managed by at least one trustee or board member who oversees decision-making and manages the trust's assets and liabilities.
Because of the collaborative effort and shared responsibilities, REIT’s typically invest in large-scale real estate projects, such as housing developments, shopping malls and apartment buildings. However, there are three different types of real estate investment trusts, each of which focuses on a different market sector: Equity REITs, Mortgage REITs and Hybrid REITs. In an Equity REIT, the associated trust invests in their own properties, by owning and usually renting out properties. In this instance, the trust makes money from managing its own real estate value, or equity.
Because of the collaborative effort and shared responsibilities, REIT’s typically invest in large-scale real estate projects, such as housing developments, shopping malls and apartment buildings. However, there are three different types of real estate investment trusts, each of which focuses on a different market sector: Equity REITs, Mortgage REITs and Hybrid REITs. In an Equity REIT, the associated trust invests in their own properties, by owning and usually renting out properties. In this instance, the trust makes money from managing its own real estate value, or equity.
In a Mortgage REIT, the trust invests in helping others own or invest in property, by providing the funds for new or existing mortgages. The trust's primary responsibility, in this instance, is to financially back mortgages. Revenue is generated by the interest the trust earns on these loans.
Lastly, the Hybrid REIT utilizes investment techniques from both the Mortgage and the Equity REITs. The group invests in their own properties and provides mortgage funding to others, thereby drawing profits from both investment sources.Investors in REITs often gain the benefits of investing in real estate, without the risk of trying it on one's own. In an REIT, individuals group together to share profits and losses, gain dividends (or shares of any revenue, after all expenses have been paid) and enjoy liquid financial investing-much like the stock market.
For this reason, REITs are a popular investment alternative for low-risk investors looking to delve into the real estate market. Individuals interested in participating in an REIT might be wise to meet with a real estate investment trust broker. Much like a stock broker, these professionals will be able to walk you through the pros and cons of each type of REIT, as well as help you diversify your accounts, offer advice and manage your portfolio. Or, if you're a savvy investor, REITs are also available for direct public purchase through open exchanges. It may be worth your while to consider investing in an REIT. For more information, visit an online financial or real estate investment resource, such as SmartMoney.com or MoneyCentral.MSN.com.
There are many other realestate investment opportunities you can consider but REIT's do have some advantages. The only thing I would caution you about is how they will fair in today's economy. Do some due diligence and if you get confused you can always resort to simply investing in Gold & Silver Coins to at least protect your hard earned money from inflation.
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