REITs – Buy Now, Sell High
With so many people panicking after this past year's investment woes, there are some great deals to be had in the investment world. One of the best ones out there is in the real estate arena.
A lot of people are reluctant to put out any type of money into investments right now, thinking that since it's a bad time, things must be getting ready to get worse and worse. Well in real estate, this is not possible.
Think about this for a minute. Unless it is going to sink into the ocean or completely disappear into a black hole, the property behind a real estate investment will always be around. Sure, it can lose money and have a tough time, but it will be around and still have value.
Another thing to keep in mind is right now, as many other investors are doing what you are doing and worrying, those who move forward and make a buy will be the ones who have the most to gain as the market starts to rise again.
It's like Albert Einstein said, "In the middle of every difficulty lies opportunity". While he may have been talking about science, it also works for the world of economics and investments. Sure we are in the midst of a difficult economic time when it seems every stock, bond and mutual fund has dropped through the floor and that any investment is doomed to fail. But, what if you look at the opportunity side of that. If you look around, the real estate market has bottomed out for the most part. That means the current opportunity is in investing in more of it and seeing a return on that investment.
Now that I have you thinking of opportunity, you may be thinking there is no way you will be able to afford purchasing properties right now. No one said you had to buy properties outright. Instead, why not purchase shares of property? This can be accomplished through real estate investment trusts or REITs. Being a part of a REIT allows you to purchase shares of a real estate development or real estate management company and still be in on the market without having to buy a whole property yourself.
In a REIT when the management group profits (through leases, rent or mortgage interest) at least 90% of that profit must be passed on to the investors. This will come in the form of a dividend. In many cases you will see a 6-10% return on your investment every year, as that is the average. In some years you may even see your real estate out perform the stock market.
Investing in REITs is easy. They are publicly traded and you can go to a website like REITBuyer.com to research the REITs you are interested in, look at their past, possible futures and even make the purchase all in the same place, as they are an investing real estate broker.
We're at a point in the economic tide right now where it's either time to make a move or stay out of the game. Only those who play can win.
Tuesday, March 3, 2009
Are You Afraid to Look At the Value of Your Investments?
Real Estate Investment Trusts to Hedge the Stock and Bond Markets
Have you taken a look at your investment portfolio lately? If you have, and it's filled with the normal stock and bond investments, you may have noticed that there has been a lot of damage to those investments in the past year or so. With the credit crunch and the market crash, most investments are half, or less, of what they should be.
This is when you should consider what you should be doing to hedge those other investments. This is where REITs come in.
REITs are Real Estate Investment Trusts. These are funds where you fund a real estate management company. There are a variety of REITs out there. Some offer a way to back real estate developers who are taking on new ventures in construction. Others are meant to fund management of residential real estate such as apartment complexes, condominiums or even neighborhoods. Still others use the funds put into the REIT to operate commercial real estate interests.
I think Louis J. Glickman said it best when he said, "The best investment on earth is earth.” Real estate is always a wise investment. No matter what happens the land will always be there. Sure it may waiver in value from time to time, but in the long run, it will always be around, unlike businesses that can close their doors and take your investments down with them.
With this said, adding a REIT or two to your portfolio it would offer you a little more diversity and security in your investments.
You never know what the stock market will do. Just in the past few decades we have seen a number of sweeping changes in the market that completely broke some investors. Think of how many people you know who went bust during the Doc.com era.
Often the problem for them was they were too focused on the flavor of the month. They were putting everything they had into the new Dot.coms hoping to continue to ride the boom and make great profits. While they did see some great profits, those did not last forever. For those who kept putting everything they had into the doc.com market, they felt the agony of defeat in a major way when the market fell, many losing everything they had.
While there is nothing wrong with trying to jump in on an up and coming thing and make a great profit, it comes down to the old 'all your eggs in one basket' cliché. You don't want to have everything hedging on one investment. Instead have a diverse portfolio so if there is a drop in one area, you have other investments hedged against it.
In this case, even when there is a drop in the stock market and mutual funds, real estate usually will hold pretty strong through the down times, keeping you from feeling that all of your investments have been swept away.
When you're ready to take a step towards diversity, make sure to do it right. Going to a website like ReitBuyer.com will help you do just that. They will not only give you the research and information you need to buy wisely, but they are also real estate brokers for these investments and can help you seal the deal.
Have you taken a look at your investment portfolio lately? If you have, and it's filled with the normal stock and bond investments, you may have noticed that there has been a lot of damage to those investments in the past year or so. With the credit crunch and the market crash, most investments are half, or less, of what they should be.
This is when you should consider what you should be doing to hedge those other investments. This is where REITs come in.
REITs are Real Estate Investment Trusts. These are funds where you fund a real estate management company. There are a variety of REITs out there. Some offer a way to back real estate developers who are taking on new ventures in construction. Others are meant to fund management of residential real estate such as apartment complexes, condominiums or even neighborhoods. Still others use the funds put into the REIT to operate commercial real estate interests.
I think Louis J. Glickman said it best when he said, "The best investment on earth is earth.” Real estate is always a wise investment. No matter what happens the land will always be there. Sure it may waiver in value from time to time, but in the long run, it will always be around, unlike businesses that can close their doors and take your investments down with them.
With this said, adding a REIT or two to your portfolio it would offer you a little more diversity and security in your investments.
You never know what the stock market will do. Just in the past few decades we have seen a number of sweeping changes in the market that completely broke some investors. Think of how many people you know who went bust during the Doc.com era.
Often the problem for them was they were too focused on the flavor of the month. They were putting everything they had into the new Dot.coms hoping to continue to ride the boom and make great profits. While they did see some great profits, those did not last forever. For those who kept putting everything they had into the doc.com market, they felt the agony of defeat in a major way when the market fell, many losing everything they had.
While there is nothing wrong with trying to jump in on an up and coming thing and make a great profit, it comes down to the old 'all your eggs in one basket' cliché. You don't want to have everything hedging on one investment. Instead have a diverse portfolio so if there is a drop in one area, you have other investments hedged against it.
In this case, even when there is a drop in the stock market and mutual funds, real estate usually will hold pretty strong through the down times, keeping you from feeling that all of your investments have been swept away.
When you're ready to take a step towards diversity, make sure to do it right. Going to a website like ReitBuyer.com will help you do just that. They will not only give you the research and information you need to buy wisely, but they are also real estate brokers for these investments and can help you seal the deal.
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