Real Estate Stock - About REITs (Real Estate Investment Trusts)

Real estate stock is a sound investment in assets with tangible value. If you pride yourself on being an up and coming investor, you should make sure you know all of the investing options that are available to you.

While most people are familiar with stocks and bonds, they may not be aware of other investment options such as the various real estate stocks. REITs are Real Estate Investment Trusts. Essentially this is a company that purchases properties and then becomes a real estate management firm.

Anyone can get involved in these investments by purchasing shares of the companies who make the purchases and manage the assets. Essentially, they will allow a certain number of investors to be a part of the trust (it is usually a limited number for each trust).

So where did REITs come from? Well the REIT was born in 1960 by congress. Before this time only those with major money were able to get into real estate investing. Everyone else had to play the regular stock market. So, they wanted to give smaller investors the chance to get in on the profit making market of real estate stock. With REITs instead of having to come up with the money to purchase a property, an investor can get in to the market by purchasing shares.

When choosing a REIT, it is important to realize that there are a variety of REIT styles. Usually a REIT sticks with one type of property. For example, there are commercial REITs that only deal with commercial real estate and ventures. They may purchase office space and rent it out to businesses. Another option is industrial real estate, purchasing and maintaining industrial parks. There are also residential buildings that vary from apartment buildings to condominiums and even complete housing neighborhoods that are owned and operated by the REIT. If you know more about one kind of real estate than another, you may prefer to fund this style of REIT where you can invest in something you undersand.

Understanding how REIT investments work is vital if you are considering going into this type of investment market. Here are some of the basics.

First, if a REIT makes money, its investors are going to make money. As a REIT earns taxable income, at least 90 percent must be paid directly to the investors. So, as a shareholder, as long as the REIT is making money, you are too!

When it comes to shareholders REITs run the gamut from small to massive, but even the small ones are not so small that they can't have any buying power. A REIT must have at least 100 shareholders.

When it comes to operations, REITs have a few major rules to follow. First, they are required to invest 75% or more of the money put into the trust in real estate ventures. Additionally, they have to be getting at least 75% of their income from monies made from the properties they own (i.e. through mortgage interest or rent)

If you are considering investing in REITs it is important to note that they are also a little different in tax structure. Since so much of the profit from a REIT is going to the shareholders, they are able to deduct that money from their taxable income. However, when you as in investor get your dividends you will be responsible for paying the capital gains taxes.

Before you invest, learn more. REITBuyer.com is not only a full service REIT broker, but also has research and educational information to help you get started and build your portfolio.

Real Estate Stocks - Don't Believe all the Media Hype

Real estate stocks -- If you have been considering REIT investing, you may have found yourself debating whether this is the way to go with the current economic situation being what it is in the United States. It seems every time you turn around that there are any number of negative real estate articles in the newspaper on the TV and even on all of the Internet news sites. You may be second-guessing your thoughts about investing.

Frankly, things are not always as bad as the media makes them sound. Part of the job of the media is making things sound more dramatic so you will listen to their coverage of the stories. And if you look back at many of the 'sure disasters' they have claimed, most were quite the overstatement. Take the Y2K bug for example. Many media reports were advising people to stock food, water and money since no computers were going to work after Y2K and therefore our whole society would collapse. It never happened. Sure, there were a few minor glitches, but most were fixed in no time and life continued on in the year 2000 with little more than a hiccup.

What else is the media blowing out of proportion?

Many are blaming the media for being the cause behind much of the financial problems that the country is believed to be having, from the stock market to the real estate industry, not because the problems are that large, but because they are making them that large.

So, how do you know what's safe to invest in. Well for one, you never really know what is and is not a safe investment. After all that is why there is risk to investing. But you can be confident in real estate stock over many other options. The reason for this is that real estate is not going to completely disappear. Think about it. Even if the price fluctuates, a real estate investment fund will still hold substantial value, even in the worst of economic times. It's not like the land is just going to shrivel up and disappear. No, unlike companies that can close their doors and take all their shareholders funds down the tube with them, real estate will always have value, even in the worst of times.

If investing in real estate is new for you, you're not alone. There are plenty of people who are just making their way into the real estate market and need a little advice to make sure they are making the right trading decisions. This is where REITBuyer.com comes in to help. REITBuyer.com is a full service REIT broker that not only can help you manage your portfolio and online trading, but is also chock full of research and educational tools as well as charts, tables and programs that can help you learn about the REITs you are interested in and make sure you go into this in the right state of mind.

There has to be a first time for everything. In this case, take a page from the book of Donald Trump, "Every day, you'll have opportunities to take chances and to work outside your safety net. Sure, it's a lot easier to stay in your comfort zone. In my case, business suits and real estate. But sometimes you have to take risks. When the risks pay off, that's when you reap the biggest rewards."

Real Estate Stock with Consistent Returns

Real estate stock is worth looking into if you're looking for an investment that has consistent returns. REITs, or Real Estate Investment Trusts are known for consistent returns and can be a positive part of your investment portfolio.

Sure, everyone wants to find the next great investment, an investment that will bring them the big bucks and make them an overnight millionaire. Although this does happen, the cases of that are few and far between. Instead, you need to focus on making sure you have a diverse portfolio that will hold you through all times.

Consider this scenario. You see the next big thing coming. You sink all of your money into that particular thing and wait for it to reach the top. Before you get a chance to pull out, the market plummets, taking all of your profits with it and possibly even some of your principal. That's a horror story that comes true for plenty of investors year after year. The flaw in their thought is that they put all of their eggs in that one basket! When the basket toppled, everything went with it.

Now consider this scenario. You see the next thing coming and put a good portion of your investment funds in that arena, while also putting some of your money into more secure or long-term investments like real estate stock. Again, you wait for the investments to reach the top, but the bottom falls out sooner than you anticipate. While you may take a major hit on the one side, your long-term investment in real estate will still be there. You will still have a portfolio with some strength, versus one that is nearly empty.

Real estate is often considered the rock when it comes to investment, just ask Donald Trump who says, "It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and I just love real estate."

REITs are a solid real estate stock investment. If you look at the overall performance of the other stock markets and most mutual funds, you will see there is not much difference in the two for long-term returns.

When you're ready to start investing in real estate stock, you need to make sure you know what you're getting into before you buy. REITBuyer.com is an excellent resource that provides all the information you need to understand REITs, where they come from and how to begin investing. Let the investment real estate brokers at REITBuyer.com help you add REITs to your investment portfolio.

Real Estate Stock – Pros and Cons

Real estate stock, aka Real Estate Investment Trusts, or REITs, are an avenue of investment that many people have heard of, but have not taken a good look into. Let's take that look now.

About Real Estate Stock – Understanding REITs

REITs are typically an investment in a property management company. As a real estate stock holder, you fund a property management company that handles real estate assets. Investors earn dividends from the profit generated. For example, a commercial real estate REIT may own a shopping center or strip mall. When you purchase shares of that REIT they are going into building and maintaining that structure. As tenants move in and rent those spaces, and the REIT earns profits, those profits come back to you in the form of dividends. This is also the case for residential real estate interests like housing developments, apartments and condominiums.

Real Estate Stock – Pros and Cons of REITs

Starting with the Pros…

Dividends – Unlike other stocks and mutual funds, REITs come with some very strict rules as to how their profits can be used. As profits come into a REIT, at least 90 percent of that profit must go right back to the shareholders in the form of dividends. That means most REITs always see a nice annual return on the initial investment.

Their Own Entity – If you have noticed, the stock market has an all for one kind of approach to things. Often if one area of the market goes down, the rest follows, hitting you across the board. Real estate stock is different. REITs are not as strongly tied to other investments and stock fluctuations; therefore, they can hold strong even when the rest of the market is on a roller coaster ride.

Solid Starting Platform – If you are not a major investor in general, REITs may be the way to begin your investment portfolio. For the most part they are stable purchases and can be capable of earning a steady profit for years to come.

Constant Investment – Since REITs revolve around property investments, there is always something tangible – a piece of land, homes, apartments or businesses. Typically, these involve long-term leases so there will be income generated from those leases to feed your dividends.

And now the Cons…

There aren't that many bad points to REITs, but here are a few:

Slow Growth - If you are looking for a major growth in your REIT, you likely won't see it. Since only 10% of the money made can be put back into the REIT (as 90% has to be paid out as a dividend) that means there is a lot less going back into the business to make it grow more quickly.

Down Times – Just like any other investment, there is always the chance that a downturn in real estate will cause your REIT to earn lower profits.

Despite these few bad points, real estate stock is worth looking into. Start by going to a full service website like REITBuyer.com. There you can get information about REITS, tools and research help as well as education and advice before you buy. When you're ready to invest in real estate stock, they are also investment real estate brokers who can take care of the entire transaction.