EXPLORE A NEW OPPORTUNITY TO INVEST - REITS
101
Financial Advice
A Real Estate Investment Trust (REIT) is a security that trades like a stock on the major exchanges and owns and in most cases operates income-producing real estate or related assets. Investors can buy and sell them like stocks throughout the trading session, since many of them are registered with the SEC. Properties in a REIT portfolio may include residential, commercial , industrial or even infrastructure projects .
YOU CAN INVEST ON REAL ESTATE WITHOUT HAVING TO BUY, MANAGE, OR FINANCE ANY PROPERTIES THEMSELVES. TAKE A BRIEF LOOK OF THE ADVANTAGES REITS OFFERED TO INVESTORS
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WHY IS A GOOD OPTION?
Diversification
Higher Yield more Liquidity
SinceREITsreceivespecialtax considerations theytypically payoutahigherrateof dividendsthanequitiesor manyfixedincome investments.REITs sharescan beredeemforcashatany moment.
Asaconsequenceof diversification,riskisminimized. Buildingdiversifiedportfolioof one'sownrentalpropertiesisto riskyandrequireabigger investment.
Long-term performance
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attractive risk-adjusted returns and stable cash flow
REITshavehistoricallyproduced solidreturns. Theyalsocan serveasaneffectivehedge againstrisinginflationrates
Transparency
They'realsorequiredtoreport theirfinancialresultstotheSEC
earn income from the real estate market, without having to buy or manage properties themselves
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WHAT ARE THE TYPES OF REITS? AND WHICH ONE BEST SUITS YOUR NEEDS
The investor will be able to choose from a wide variety of REITs
Equity REITs Retail REITs Residential REITs
Ownandmanagepropertiesand collectpaymentsfromtenants. Revenuesaregeneratedprimarily throughrents
Ownandoperateavarietyof commercialpropertiessuchas shoppingmalls,officebuildings, anddatawarehouses.They generateincomefromrents receivedfromtenants.
Ownandoperateavarietyof residentialhousingproperties. Theseincludemulti family apartments,studenthousing,and evensingle familyhomes.
Healthcare REITs
Investintherealestateof hospitals,medicalcenters,nursing facilities,andretirementhomes
Mortgage REITs
Investinmortgagesandderive theirincomefrominterest payments.
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WHAT COULD BE THE ASSOCIATED RISKS? HOW TO AVOID THEM?
Understand those risks that investors needs to mitigate when they invest in REITs
Real Estate Risk
Fluctuationsinpropertyvalue,leasingoccupancy, andgeographicdemand
Interest Rate
Interestrates, canaffectpropertyvaluesand occupancydemand
Occupancy rate
REITsmustmaintaincertainoccupancylevels
Real Estate Risk
REITscanhaveanarrowgeographicfocuswhere themajorityofthepropertyislocatedinaparticular areaorregion
Low Growth
REITsdon'toffermuchintermsofcapital appreciation.Aspartoftheirstructure,theymust pay90%ofincomebacktoinvestors
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AVOID THESE MISTAKES
SELLINGATTHEBOTTOM NOTANALYZINGAREITCAREFULLY
LETTINGFEARKEEPYOUFROMBUYINGGOODREITS
ONLYCONCENTRATINGPOSITIONS,NOTDIVERSIFYING
SSUMINGTHINGSWILLRETURNTONORMALQUICKLY
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