Is REIT a Good Real Estate Investment?
It is one of attractive methods of Real Estate Investments. REIT is abbreviation of Real Estate Investment Trust. It is a corporation (or other business entity) that combines the stockholders capital to acquire real estate properties.
The most attractive aspects of this investment is that Real Estate Investment Trust generally does not pay federal corporate income tax and its income can be distributed to stockholders without double taxation at the corporate and stockholder levels. To be eligible for those favorable treatments under IRS Code a Real Estate Investment Trust must distribute to stockholders at least 90% of its taxable income.
In simple words, when you are investing in Real Estate Investment Trust, you are investing in Real Estate without acquiring real estate properties personally.
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How to Profit from REITs Investments?
Profiting strategies with Real Estate Investment Trusts are very similar to ones you consider investing in stocks and mutual funds. The only difference is that you consider and research the stocks of the companies in the pretty narrow market niche - the companies that have favorable treatment under IRS Code as Real Estate Investment Trusts.
Then you evaluate those companies - financial reports, historical performance, in what kinds of Real Estate the company invests (e.g. residential Real Estate, commercial Real Estate, industrial properties, mortgages), etc.
There are the following options to invest in Real Estate Investment Trust:
- Buying stocks of publicly traded Real Estate Investment Trusts (e.g. on NASDAQ or NYSE)
- Buying shares of private Real Estate Investment Trusts
- Buying shares of REITs-based mutual funds (they manage portfolio of various Real Estate Investment Trusts)
Each option has own pros and cons. We recommend excellent
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It covers many new discovered profitable startegies in Stock and REIT Investments.
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