About Reits: Frequently Asked Questions
Real Estate Investment Trusts REITs enable all investors to invest in largescale incomeproducing commercial real estate backed Mortgages which is both owned and managed by professional companies. REITs provide portfolio diversification and strong reliable dividend income.
What is a REIT?
A REIT is a company that owns and operates incomeproducing commercial real estate of which the shares are traded on major stock exchanges. The income is generated from rents of apartment building offices shopping centers hotels and other commercial real estate.
Why were REITs Created?
REITs were created by Congress in sixties so that all investors would be able to invest in incomeproducing real estate and large scale commercial properties in the same way they invest in other industries. The shareholders earn a prorata share of the economic benefits derived from the income produced by the ownership of commercial real estate.
Who Manages REITs?
REITs are managed by an executive management team that decides which properties to own and manage. A board of directors oversees the teams decisions and is responsible to the shareholders. REIT directors are well respected members of the real estate business and professional communities.
Why Invest in REITs?
REITs are total return investments with high dividends and the potential for moderate longterm appreciation. REITs are required to distribute at least 90 of their taxable income to shareholders each year; therefore REITs are among the companies paying the highest dividends. The dividends are derived from rental income from tenants who occupy the properties; therefore it is typically stable and predictable. REITs offer portfolio diversification which reduces risk stable dividend income and high dividend yields.
How does one Invest in REITs?
Individuals may invest by purchasing shares through a securities dealer. One can hire a broker investment advisor or financial planner to assist in analyzing their financial investment needs. Knowledgeable investors can contact a REIT directly to request a copy of their annual report prospectus and other financial information. Less experienced investors can find information on financial websites or research REITs in local libraries.
Just like with other publicly traded securities investors may buy common stock preferred stock or debt securities. One may also diversify their portfolio by purchasing shares of REITs in mutual funds or exchange traded funds.
This article was written by Robert Shumake CEO of Inheritance Capital Group LLC and founder of http://reitbuyer.com/ an online service for people who wish to invest in real estate without the headaches and liability exposure that go with being a landlord. Visit Roberts website to learn more about Real Estate Investment Trust.
About the writer: Robert Shumakes mission is to inform the public about mortgage fraud and real estate scams and to provide tips on how to avoid being a victim. Sometimes people will commit identity theft to obtain a housing loan sell someone elses house or take over someone elses property; says Shumake. It is my goal to inform the public on how to protect themselves from being victims of this crime.;
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