Are REITS a good way of investing? What are the Pros and Cons of investing in reits?

Question

what exactly are REITS in your own words?

Answer 1

As one of the previous responders mentioned, they are just like other type investments are far as the risks and rewards go.

They do have one notable CON. The dividends are taxed at the full tax rate rather than the preferential rate of normal dividends.

Historically they as a group have been good investments. Like all other investments there are some good ones and some not so good ones.

Another very slight con is that there are many different flavors of REITs, so you have to do considerable home work in order to pick good ones.

There are index funds that invests in a variety of REITs. VNQ is one.

Answer 2

I really like REITs. I think they are a great no-hassle way to get into real estate investing, while still maintaining liquidity. Real estate is not a liquid investment. It is not easy or quick to buy and sell real estate. But REIT make real estate like a stock, an asset that can be traded in a market. I think any portfolio should have around 15% to 20% REITs. Here is a portfolio of some interesting REIT stocks:

http://www.top10traders.com/ViewPortfolio.aspx?userID=565

This is from http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors.

Good luck!

Answer 3

Reits are like any other investments there are always some type of risk involved. If you are looking for a no risk investment instrument the best thing to do is leave accumulated money in your mattress.

I find reits attractive because I have found that you can almost be selective in the types you chose to invest in.

Like any other investment vehicle, you have to select someone with knowledge of what they are doing so before you run out and find a office with REIT on it investigate it first. See how long they have been a round, what area of the country they are in. Are they the type you want, I mean if you want to invest in shopping centers you would not want one that did real estate development of residential homes.

So I would check the Chamber of Commerce where they do business with, How many projects they have upcoming, how many are successful and are still on going. The portfolio and what is in it. Find out from other members what their feelings are about. I guess one of the top things is the management of the trust the top guys that make the decisions about the direction in which the trust is going and how they come about their
decisions, as well as how long they have been in the field and thier track record.

Now you have to select one that suit you as an individual. What are your goals, what and how much risk are you willing to take. Do you want a safer more secure investment then invest in less riskier projects. If you want to earn abit more then you should invest in the more, not most, riskier instruments.

Also some projects are long term, whereas some are short term, another decision to be made.

I have found most reits to be fairly safe with a better than stock return in most cases. I am not down on stock I do have dollars there also. I like reits better because I have been in the real estate field for awhile and sort of know a bit more about it than stocks.

There are many cons as well as pros as there are in stock the bottom could fall out of real estate, but it haven't. Down turns are often short lived.

So if you do your home work about management, the type of investment, the company itself, past history you will not take all the risk out, but you will eliminate a lot of it, therefore making the cons a lot easier to take, but then if you did stock the same way you will find that you will be more successful.

I have a f ew dollars in real estate development (sorta risky) I have a few dollars in shopping plazas and malls (not as risky) then there are a few in residential apartments.

So you have to selectg the one that fits you and your goals.

I hope this has been of some use to you, good luck.


"FIGHT ON"

Answer 4

Trusts in general are different from publicly held companies ( what you normally buy'stock in). Trusts must ,by law, distribute profits to " unit-holders" different types of trust disburse different percentages.
Real Estate Investment Trusts ( REITS) can be invested in many different aspects of the business (the first answer that said the real estate market was in decline was partially right homebuilders have faltered) but there are REITs in rental units, in malls, other commercial properties, also in mortgages...so there are still plenty of options open to invest in. Most importantly : those distributions of profits come quarterly or even monthly..can be immediately re-invested or sent to your investment account as cash.
They are an attractive, dependable, relatively safe option for many investors.

Answer 5

A REIT (Real Estate Inv. Trust) would have been a great way to make money prior to the decline in the housing market. You basically invested in companies that developed areas of real estate ,ie, strip malls, etc . But since the end of 2005, the housing market has gone way down in most parts of the country. Try www.beginnersinvestment.about.com/real estate investment trust

Answer 6

All investments have hazards and hassles. regardless of the indisputable fact that, between the advantages of REITs is that countless the hassles are dealt with through others. also positive--you're invested in a large style of houses at one time. you may do advertisement investments--many times a sensible bypass. established in case you do your analyze you may do quite nicely for your self. As to actual identifying to purchase houses--nicely you may do nicely lower back, in case you recognize what you're doing. regardless of the indisputable fact that, you truly must have a significant quantity of money no be counted the way you make investments once you're going to achieve fulfillment because there are one of those vast quantity of expenses AND once you've undesirable tenants, no tenants, vandalism, issues that choose repairing, jumps in property tax, utilities (each and every now and then concerns to you the owner), etc. you basically took vast hits. For those of modest ability, REITs are probable smarter. in case you recognize a lot about RE and performance a superb cushion, there is even in this marketplace, funds to be made. the popular man or woman is unquestionably more desirable off with a REIT today. undergo in concepts, regardless of the indisputable fact that, to inform your Congressmen to get those Bush tax cuts made everlasting because in the different case so a lot more desirable of your income is stolen from you. do not enable the ignorant declare the inventory marketplace is for the wealthy--were given a retirement fund? you're a inventory holder. you do not pay income tax on an IRA, yet in case you imagine once you bypass to tug out funds from a 401(ok) that taxes were and are beside the point--marvel! And sure i recognize there are Roth 401(ks)--few and far between. No change for countless analyze and under no circumstances making an investment to the point the position losses smash you.

Answer 7

REITS are usually pretty stable investments. I like medical reits.

here is a little more of an in-depth explaination as far as pros and cons go

http://the-real-estate-resource.blogspot.com/2006/12/investing-in-real-estate-reits.html

Answer 8

Real estate is always a wise choice. The cause of the great depression was hedging on companys. Companys fall as seen in the "dot com" bust of the late 1990's. Real estate rises and falls. But will always remain solvant so much as you don't touch the principle.