What is a REIT? DEfinition of a real estate investment trust

TAMPA, Fla. - Jan. 16, 2015 - PRLog -- What is a REIT anyhow?

REITs are like those books that everybody quotes but nobody has read. So, let's just say that a Real Estate Investment Trust (REIT) is like a mutual fund that deals only in real estate investments. You put your money in a common pool with which properties are bought, sold and moved in and out by a fund manager. As an owner of shares in the REIT, you will get a proportional profit as share value appreciates.

REIT are still a ‘stock’ investment. It usually pays good dividend for passive income but you are subject to market fluctuations. It’s much easier to get in than Real Estate.

Real Estate Investment Trusts (REITs)

The Good

 REITs is how “hands off” it is and how picking strong REITs can provide a steady passive income source.
The investor can get real estate investment exposure without directly dealing with clogged toilets and late rents.
The barrier of entry is much lower where  any investor with a brokerage account can get REIT exposure.
One of the major advantages of REITs over rental properties is the diversification possibilities.  Instead of having a large portion of your capital in a single property, you can have them spread out over many properties across the country via a REIT.

The Bad
Sounds like a no brainer to go with a REIT instead of owning property directly, however, there are drawbacks.

For those of you who like the “control” of owning rental properties, REIT performance depends on the management of the company.
Your investment capital will be at the mercy of the volatility of market which can fluctuate significantly

Questions? Contact us!

www.MintcoFinancial.com

Michael Minter is an investment advisor with LifeMark Securities and Managing partner of Mintco Financial (http://mintcofinancial.com/), a wealth management firm with offices in Florida and New York.

If you’re interested in working with a full-service advisor who uses the same strategies you’ve read about on this blog,contact us to set up a consultation or visit our website to learn more about our services.

www.MintcoFinancial.com

Florida 813-964-7100
New york 716-565-1300