Are Real Estate Investment Trusts (REITs) A Good Investment Right Now? The Pros And Cons

Although the Federal Reserve is not worried about inflation, housing prices all over the country are through the roof.

There is no denying that the appetite for real estate is at all-time highs due to a combination of demographics, Central Bank policy, and major Wall Street firms stepping into the real estate markets. There are various options to invest in real estate with little or no money as an individual investor.

Today we will deep-dive into Real Estate Investment Trusts and if REITs are a good investment now. Investing in REITs can be a great way to incorporate portfolio diversification.

Real estate investment trusts or REITs own, operate, or finance income-producing real estate across many property sectors. The real estate investment trust is a way to invest in real estate passively.

What Is A Real Estate Investment Trust (REIT)?

Types of REITs Equity REITs

Equity REITs are the most prevalent type of REITs. Equity REITs own or operate income-producing real estates like shopping malls, commercial real estate, health care facilities, apartment buildings, warehouses, office buildings, cellphone towers, and hotels.

Mortgage REITs (mREITs) only provide financing for income-producing real estate by borrowing money at low short-term interest rates and purchase mortgages that pay more excellent long-term interest rates. The difference between the two rates is the Mortgage REIT’s profit. Mortgage REITs don’t own or operate real estate property.

A hybrid REIT is a real estate investment trust company that effectively combines equity and mortgage REITs (mREITs). They own and manage properties collecting rents, and also invest in mortgage securities. Hybrids REITs try to profit from rising and falling interest-rate environments by investing in actual properties and mortgages.

Public non-listed REITs are registered with the SEC and are therefore regulated, but they are not traded on public exchanges. They operate like listed REITs nearly every other way.

Private REITs are exempt from SEC registration and whose shares do not trade on national stock exchanges. Private REITs have little liquidity, and hence it can be challenging if you need to sell immediately. They are typically only available to accredited investors.

Swipe Up to learn The Pros And Cons of a Real Estate Investment Trusts (REITs)



Famous Warren Buffett Quotes Encompassing 9 Decades Of Wisdom

Should I Buy Stocks Now? 6 Factors To Consider

15 Good Reasons To Retire Early