Wednesday, December 9, 2009

REITs are Liquid Real Estate Investments

When you think about investing in real estate, you probably think that means investing money and being without it for a long time. This is to be expected as most people think of real estate investing as purchasing a home or pieces of land. The loans for these purchases often take many years to repay.

There is a better way. The difference between real estate investing and real estate purchasing is the liquidity; or ability to have your money when you need it.

Here's a look at the difference. In real estate purchasing, you are buying properties and then you are responsible for managing and maintaining them.

On the other hand REITs are real estate investments. They are purchased in shares, just like mutual funds. If you need some liquid cash or just no longer want to be a part of a REIT, you simply sell your shares as you would with any other stock or mutual fund investment.

In many respects, REITs offer the same flexibility as any of the other markets, while at the same time offering you the chance for a longer-term secured investment.

What I mean by secured investment is that for the most part real estate always has some value. While the value may fluctuate, it is a physical asset that will retain some value over the long term. In other stocks and mutual funds, if the company that you are purchasing shares from goes out of business, you can lose everything. In the case of real estate investing, there is always an asset with worth involved.

Many people steer away from REITs because they are not a ‘get rich quick’ investment. Though that is true, REITs generate constant regular returns in dividends without the big spikes. With that said, think about what else is in your portfolio. If you have other stocks and mutual funds in your portfolio adding real estate investments will give you a more stable backbone to base your investment profile on.

There is also another way to add diversity to our real estate investment trusts. Instead of just owning commercial, residential or US based REITs, you can purchase shares in a number of different investment trusts across the world and across all markets.

When you're ready to jump onboard and diversify your portfolio with the addition of a few REITs, take the time to do some research so you understand what you want and how to get it. has all the information you need to get started investing in REITs. The research and analysis of the REITs has been

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