Wednesday, December 9, 2009

REITs: Real Estate Investments with Real Profits

Many investors say they want two things in their investments – a nice return on their investment and security. They want reassurance that their money will not be here today and gone tomorrow. When it comes to the stock market or purchasing mutual funds, those are two things that cannot be guaranteed. When you purchase stocks, you never know if the company is going to have a bad quarter, losing a large part of your investment or if they are going to fail altogether, losing all of your money.

The only place you can really be sure that you will not lose everything when the economy is down is with real estate.

Even if the bottom falls out of the real estate market, your real estate investments are tangible assets. Real estate will always have some value; therefore, you cannot lose everything. During times of declining values if you hold on to your investment you will see dividends come in again like nothing ever happened.

There are two ways to invest in real estate. The first is to make a real estate purchase. For the most part this means having a lot of cash available to buy a property. Most average people do not have this kind of money.

The easier way to invest is by purchasing REITs or real estate mutual funds. By purchasing a REIT you are a shareholder in property ownership. This means you will purchase shares that go into a collective fund that is used to purchase and maintain income producing property. These properties can include single family residents, attached apartments or condos and large commercial developments.

With REITs the real estate management group makes a profit which is distributed to shareholders in the form of dividends. Laws dictate that at least 90 percent of the profits from a REIT must be returned to the shareholders, so barring a major downturn in the economy you know you will get a return on your investment year after year.

The remaining 10 percent of the profit from the REIT is used for management of the properties or possible improvements that will increase your profit potential.

Unlike traditional real estate investments, REITs are liquid; if you need to pull some of your money out it is as easy as selling a few shares instead of having to go to the trouble of selling the property and managing it until you finally close the deal.

Getting into the REIT market is quite simple. Just go to where you can learn more about REITs and research the REITs out there. You can also make your purchases with the real estate investment brokers. is an online brokerage information site specializing In REITs and Real Estate Mutual Funds – The World’s first and only site dedicated to REITs Real Estate Mutual Funds. This is a place for the small investor to own a piece of world class real estate.

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