Real Estate Investment Trusts
With the stock market as it is, investing may seem like a risky proposition. And this is especially true for the real estate sector, and related sectors. However, if you have the risk tolerance for it, and if you choose carefully, you might find some winners in bargain-priced real estate investment trusts.
What are real estate investment trusts?
Real estate investment trusts (REITs) are specific companies. These companies are comprised of a variety of real estate related properties and concerns, such as mortgage lenders, warehouses, residential property and/or commercial properties. They are traded on the stock market like equities, which makes them fairly simple. And, REITs ensure that real estate investing isn’t just about owning property.
Many REITs have fallen in value recently. Some are likely to recover in the coming years. If you choose properly, you might be able to get a good bargain in a real estate investment trust with strong fundamentals (look for low debt, cash flow and fewer land holdings). Then, if your investment portfolio is in a place that you can afford to wait the years it will take to fully move out of this real estate down cycle, you may find that you are in a great place.
Disclaimer: I am not an investment professional. I am an enthusiastic amateur. Before making your own investments, you should do your own research and/or consult with an investment professional.
Tags: Investment, investment-blog, investment-portfolio, real-estate-investment-trusts, real-estate-sector, REITs, risk-tolerance, stock-marketRelated Stories
POSTED IN: Investing, Real Estate
4 opinions for Real Estate Investment Trusts
Nicole
Oct 23, 2007 at 10:44 am
I agree wholeheartedly. REITs are at bargain basement prices right now. I believe that they will be in the toilet for at least a couple more years but are a great buy long term! My only advice would be to hold REITs in a tax advantaged account like a ROTH IRA if you can because of the high dividends they pay and the tax ramifications.
miranda
Oct 23, 2007 at 10:55 am
Very good point! Thank you for reminding us of the consequences of investing decisions. We so often forget to consider dividends and taxes when we choose an investment. Putting a REIT or two in the retirement account could be a great way to build it up, if you have at least seven to ten years to retirement.
Wayne Bienek, Real Estate Web Design
Nov 6, 2007 at 8:39 pm
Real Estate investing (REIT) is a very good long term investment.. but good mutual funds are also a good investment.
History has proven these facts. With real estate though, you can often put your ‘hands’ on your investment.. REITs seem to be a good balance of both!
Wayne Bienek
http://www.webcontentsolutions.com
miranda
Nov 6, 2007 at 10:11 pm
REITs are generally more aggressive than mutual funds, although there are some growth mutual funds that can be fairly risky as well. And ETFs are starting to get some play as well.
The important thing is to look at your portfolio and your risk tolerance an make sure you are properly diversified.
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