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Sternberg Jack

real estate investment trusts (REIT’s) are for-profit trust established by Congress in 1960. Its purpose is to give small investors the opportunity to invest in large properties producing income.

stocks many public REITs are available in major stock exchanges and offer investors an efficient way to invest in real estate. Each shareholder of the REIT earns a share in the profits. There are also REIT privately owned sites operating in the same way.

In general, these trusts are clearly a long term investment strategy, but a good year for people who do not have the time or inclination to full-time investors. In the categories of public and private REIT that several types of trusts:

Equity REIT. These trusts own and operate income-producing properties (eg, shopping centers, apartments, office buildings, warehouses, hotels, etc.). They may specialize in a particular market sector in a specific geographic location, or you can invest in domestic.

mortgage REITs. These trusts are concentrated at the end of corporate finance. They tend to be property owners and operators to provide credit or indirectly through the purchase of credits (eg, Ginnie Mae mortgage-backed securities, etc.) Income from these trusts, the latter comes mainly from interest on mortgage loans.

hybrid REIT. These trusts combine the investment strategies of equity REITs and mortgage REITs. Qualifications for public REIT to qualify as a REIT, companies must generally: to pay at least 90% of their taxable income to shareholders each year. With at least 100 shareholders. Invest at least 75 percent of its total assets in real estate. . Get at least 75% of their income on rent or mortgage interest in the properties of their portfolio

Public Benefits REITS.These trusts have several advantages: no minimum required. They have a lower risk compared to stocks. They are a good source of income and provide a steady stream of income. There is no public market fluctuations in 2005, all REIT’s has produced a yield of 10.68% over a period of 20 years. (Source: National Association of Real Estate Trusts) REITs offer good dividends, but are subject to tax) that diversification and therefore safer. Offer high liquidity, it is easy to enter and exit a REIT

A company or trust REIT generally does not pay corporate income tax to the IRS or state

Contra .. The public REIT. It fits into a particular investment area can seriously damage a REIT investment. However, this possibility can be reduced by investing in diversified REIT business owners in a variety of industries.

Another disadvantage is that the public REIT’s, typically, they do not work as well as the stock market in long-term historical basis. These REITs private property trusts have all the advantages of public REIT. However, they tend to generate higher incomes and pay higher dividends (6.7% versus 6.5% with a pubic REIT.

On the downside, the fees in advance can be higher than public REIT and such trusts are also in the liquid In other words, it can be difficult to withdraw the public REIT

A third potential disadvantage is the limited transparency; .. ie investors can not know exactly what managers which are the everyday methods of investing in REITs can buy shares in individual companies., or you can invest in diversified REIT mutual funds. It is very easy to invest in vehicles such as IRA, Keogh, etc. Also , You can invest with borrowed money to buy shares of the REIT’s Series

Key point: .. REITs use long-term investment strategy

About

Author Jack Sternberg is a recognized expert the national real estate investment has been in business for over 30 years Sternberg is the creator of the famous “first customer” program .. its offerings totaling more than 0 million and was a closing table more than 1500 times. For more information, visit target = “_new” href = “http://www.askjacksternberg.com”>