What Is A REIT And How To Invest In It?

February 01, 2014  //  Posted by: cooldude  //  Category: Property Investments

REIT investmentReal Estate Investment Trust or better known as REIT is a good way to generate a considerable amount of capital and at the same time get a reliable cash flow. In addition to all this the investor will also have an advantage of an asset backed security. But the only catch to this type of investment is that they have to be long term. The name real estate investment should strike a note that they are not for short terms. REIT is a good choice when the economy is down and the mortgage rates are way high than what they should be. You might ask the procedure to invest in REIT. Here are some easy steps that will help you:

• The first thing is to get qualified for REIT. This is possible if you invest a minimum of 75% of your total assets in the given real estate. This is the first stage. After that comes the taxable income which has to pass 90%. One thing that would a benefit for the investors is if someone is investing in REIT then there are no obligations to pay corporate taxes.

• Second point is the yield that would result after the investing in REIT. With the yield you can invest further in another REIT policy or else you can take home the money. The benefit of investing it further is the fact that the interest will be compounded annually which would result to a much bigger figure. Suppose you have invested 1000 bucks and the interest is approximately 4%. The yield you get after 2 years, if you plan to invest it further then the rate will increase which will in turn increase the total amount of money which you invested initially.

That is why investing in REIT is becoming so popular these days. It is a win-win situation for the investor.

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