{"id":151156,"date":"2023-07-27T07:27:46","date_gmt":"2023-07-27T07:27:46","guid":{"rendered":"https:\/\/businessyield.com\/?p=151156"},"modified":"2023-07-27T07:27:48","modified_gmt":"2023-07-27T07:27:48","slug":"reit-investing","status":"publish","type":"post","link":"https:\/\/businessyield.com\/real-estate-investment\/reit-investing\/","title":{"rendered":"REIT INVESTING: What It Is, Types and How to Invest","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

Without a doubt, one of the best investment decisions that anyone can make is to invest in properties. Unfortunately, a good number of people who will like to invest in properties couldn’t because it cost a fortune. Luckily, there\u2019s an opportunity for people of diverse income levels to invest in real estate<\/a> through REITs. REIT stands for Real Estate Investment Trusts and this is a compelling investment opportunity that had attracted both seasoned investors and newcomers alike. With REITS investment, you can earn passive income as an investor. It also offers diversification within the real estate sector, making it a wise investment option. This guide breakdown how REIT investing works for experts and beginners, its cons and pros, the best options available, and the app.<\/p>\n\n\n\n

What is REIT Investment?<\/span><\/h2>\n\n\n\n

A Real Estate Investment Trust (REIT) is a type of investment vehicle that allows individuals to invest in real estate assets. REITs pool together funds from multiple investors to purchase and manage various types of real estate, such as commercial properties<\/a> (office buildings, shopping centers, hotels) and residential properties<\/a> (apartment complexes, single-family homes).<\/p>\n\n\n\n

REITs provide investors with the opportunity to invest in real estate without directly owning and managing properties themselves. By investing in REITs, individuals can gain exposure to the potential income and appreciation of real estate assets, diversify their investment portfolios<\/a>, and access a market that would typically require substantial capital and expertise.<\/p>\n\n\n\n

Types Of REITs<\/span><\/h3>\n\n\n\n

The following are the various types of REITs Investing:<\/p>\n\n\n\n

#1. Equity REITs<\/span><\/h4>\n\n\n\n

This is the most common type of REIT. Equity REITs invest in and own income-generating properties such as office buildings, retail centers, apartments, industrial complexes, and hotels. They generate income primarily through rental payments from tenants.<\/p>\n\n\n\n

#2. Mortgage REITs (mREITs)<\/span><\/h4>\n\n\n\n

Unlike equity REITs, mortgage REITs invest in real estate mortgages and mortgage-backed securities. They earn income through interest payments from the mortgages they hold or invest in. mREITs can also invest in other real estate-related debt instruments.<\/p>\n\n\n\n

#3. Hybrid REITs<\/span><\/h4>\n\n\n\n

Hybrid REITs combine the characteristics of both equity REITs and mortgage REITs. They invest in a mix of income-generating properties and real estate debt instruments, allowing them to generate income from both rental payments and interest payments.<\/p>\n\n\n\n

How to Qualify as a REIT Company<\/span><\/h3>\n\n\n\n

To qualify as a REIT, a company must meet certain criteria set by tax laws. By meeting these criteria, REITs can enjoy certain tax advantages, such as the ability to deduct dividends paid to shareholders from their corporate taxable income. This structure allows REITs to pass most of their taxable income to investors and can result in higher dividend yields compared to traditional stocks. Investors can buy and sell shares of publicly traded REITs on major stock exchanges, similar to stocks. There are also non-traded REITs, which are not publicly traded but are typically sold through broker-dealers or financial advisors. These criteria typically include:<\/p>\n\n\n\n