Real Estate Investment Trusts (REIT) are securities that trade like stocks and offer investors the opportunity to invest in large-scale commercial real estate projects directly. REIT properties can include investing in properties such as shopping malls, apartments, office buildings, hotels, hospitals, student housing, and warehouses. REITs offer investors high yields which provides consistent income as well as a liquid method for investing in real estate.
Equity REITs: are investment and ownership of properties. Revenues are generated primarily from property rentals.
Mortgage REITs: is the investment and ownership of property mortgages. Revenues are generated primarily from interest earned on the mortgage loans.
Hybrid REITs: include investing in both Equity REITS and Mortgage REITS.
REITS are not taxed at the corporate level. Therefore, 90% or more of the taxable income must be passed to shareholders.
REIT investments increase in value as the real estate appreciates in value and the share price may rise which increases the value of the investment.
REIT investments offer long-term income streams due to long-term lease agreements with tenants.
REIT investments are considered a liquid asset because they trade like stocks and are easier to get into and out of, unlike other forms of real estate investments.
REIT investments offer investors the opportunity to invest in multiple real estate sectors. For example, if you are a REIT investor with properties in the commercial development industry, should there be a downturn in the economy, if you are an investor in multiple sectors, you can still benefit from other areas such as Retail REITs.
REIT investors become property owners and partial owners of an operating business. REIT properties are managed by hired management teams. This removes the investor from managing operational details such as marketing, rent collection, tenant management, and property maintenance. REIT investors collect their dividends without the headache of property management.
Healthcare: primary property holdings include senior housing, hospitals, assisted-living facilities, or medical office buildings.
Hotel/Motel: primary property holdings include hotels, motels, resorts, or lodging.
Industrial: primary property holdings include commercial industrial facilities and multi-tenant industrial facilities.
Office: primary property holdings include commercial office properties and office buildings.
Residential: primary property holdings include apartments, multi-family housing, or student housing.
Retail: primary property holdings include regional malls, shopping centers, or strip malls.
Mortgage: primary holdings include loan portfolios that specialize in underwriting, acquiring and holding debt obligations guaranteed by real estate properties.
Hybrid: primary holdings include both equity and mortgage investments.
Real Estate Investing in REITs offers a more diversified investment option for both new and seasoned investors. REIT investors are not limited to geographical locations, property type, or minimum investment.