Thursday, February 26, 2009

Why REITs Are Better Than Stocks Historically

Getting to Know Two Kinds Of REITs

By now, you may have heard of REITs. If not, this stands for real estate investment trusts. These are essentially funds that you can purchase shares of to build, buy or manage real estate holdings. Annually, the bulk of the profits from the real estate holdings are used to send dividends to the shareholders.

Generally there are two kinds of REITs – Property Owning and Mortgage.

Many of the most popular REITs fit into the first category – property owning. These are REITs that use their funding to purchase properties and then make a profit from those properties that they pass on to their shareholders.

These REITs could own any of a number of property types. Many focus just on commercial real estate such as strip malls and stores. Others focus on residential real estate like homes, condominiums and apartment complexes. Still others have a focus on the industrial sector, with real estate investment in warehouses and other industrial needs.

The other style of REIT is a mortgage REIT. These REITs are more on the backside of things. Their money goes into mortgage securities and purchasing mortgages with a hope to make a good profit on the interest from those properties.

There are also REITs that combine both of these aspects and put some of their money into each area.

For the most part, REITs are a smart investment. Generally they see a return of 6-10 percent on investments. They can always see more, but many people just like the fact that for the most part they will have a positive return that they would not have seen otherwise.

Before you begin on any sort of investment path, you need to know just what you are getting into. That means you need to do your research. If you want to start to get a look at some REITs and what they do, that's not a problem. Just like other stocks, bonds and mutual funds, they are publicly listed, so you will have no problem finding them and seeing how they are faring in comparison with the stock market.

The wisest way to go about this research is to use a site like REITBuyer.com. This is a site that is focused on this specific type of investing. You will be able to do the research you need to learn about the specific REITs you are interested in, plus get a lot more.

One of the things you may want to keep an eye on at REITBuyer.com is the news feed. It is news specifically related to the REIT market. That means you don’t have to spend a lot of time sorting through all the financial news of the day. The information you need will be right there.

Then when you are ready to buy, that's made easy as well. Considering that REITBuyer.com is a complete investing real estate broker, you will be able to buy, sell and trade your REIT investments right from their website.

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