REITS – Should You Own Them?
By Larry Lane for InvestorZoo.com
You’ve undoubtedly heard about the three million homeowners who have gone into foreclosure this year. There are pundits that say the commercial real estate market is the next segment of the market to experience a huge downturn. If you’re a value investor, you might consider now the right time to enter into the real estate market. Real estate has certainly experienced a significant downturn, thus you think you’re buying a property on sale at a severely discounted price. You have also determined that the economy may be on its way to turning around and moving toward recovery.However, you may not be cut out to be a landlord. You do not want the responsibility of collecting rent or being woken up at 2am when your renter’s pipes have burst. Real Estate Investment Trust or “REIT” may be a great investment alternative to purchasing a rental or investment property.
What is a REIT?
REITS stands for Real Estate Investment Trust. A REIT is a company that invests and manages real estate projects. As with stocks, there are several types of REITs you can invest in. Some REITs will specialize in commercial projects such as shopping mall or office buildings; other trusts will invest in apartment complexes or residential developments.REITS are publicly traded companies. They are highly liquid and are traded just like any other stock. Like most other asset classes, you can choose to invest in a mutual fund or ETF to mitigate your investment risk.
Spreading your risk
There are hundreds of different REITs and mutual funds which specialize in REITS. As always, you must choose which section within the REIT universe that suits your needs.An ETF REIT may invest in 20 or more different REITS, thus spread default risk.
Diversification
REITS can be considered non corrolated verses equities. The 20 year historical return for a REIT is 10.57%, slightly higher than the S&P 500. For historical returns, go to: http://www.nareit.com/nareitindexes/web3.htm
Please consult with a financial planner to see if REITS fit in your investment strategy.
Larry Lane is the editor for www.InvestorZoo.com, a social networking dedicated to personal finance
www.reit.com Ken Rosen, chairman of Rosen Real Estate Securities and Rosen Consulting Group, has been involved with real estate research and investment for more than 30 years. Over that time, particularly with the onset of the Modern REIT Era, he says that listed REITs have had a dramatic impact on the commercial real estate industry. “Listed REITs have basically changed everything regarding investors’ view of real estate,” Rosen says. “Normally real estate was an illiquid investment and you didn’t have the opportunity to have any transparency.” Rosen says REITs have added liquidity, transparency and really great management teams. “You don’t buy a building anymore, you buy a portfolio of buildings, and a management team and a capital structure,” he says. “REITs have broadened the investment base dramatically to individuals. For institutions, REITs give them another option.” Going forward, Rosen says the fact that REITs were able to recapitalize their balance sheets following the Great Recession and many private companies are still struggling for capital is a great indicator that listed REITs are poised for long-term success. “The fact that they went through the difficult period of 2008 and 2009 couldn’t have been a more vigorous test,” Rosen says. “We only had one bankruptcy (General Growth Properties) and of course that is now working itself out. It shows that you can have public real estate companies survive and thrive in even the worst of worlds.” In addition, Rosen …
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Question by Joanne Hsu: Where can I find essays online regardin Reits?
Where can I find articles online as to introduction of REITS in US, especially the types of the projects the REITS invest in. In Taiwan, REITS will be allowed to invest in yet-to-be-completed real estate projects. I will write an essay about this amendment and need to know what other countries deal with the yet-to-be-completed real estate projects. Could any tell me where I can find related essays?
Best answer:
Answer by CottonPatch
Have you tried www.wikipedia.com
good luck
Know better? Leave your own answer in the comments!
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Category: REITS
ask.com Trust me is awesome
GOOGLE
If you want information on Real Estate Investment Trusts and funds then just search REIT, and there are loads of pages.And yes REIT’s are investments in development real estate primarily,that’s the point, invest for a return based on the profits,although you are correct in your implication REIT”s do also invest in existing properties.Search REIT and good luck,your going to get mountains of information.