Don't Believe Media Real Estate Hype
If you have been considering REIT investing, you may have found yourself debating whether this is the way to go with the current economic situation being what it is in the United States. It seems every time you turn around that there are any number of negative real estate articles in the newspaper on the TV and even on all of the Internet news sites. It may have you second-guessing your thoughts about investing.
Frankly, things are not always as bad as the media makes them sound. Part of the job of the media is making things sound more dramatic so you will listen to their coverage of the stories. And if you look back at many of the 'sure disasters' they have claimed, most were quite the overstatement. Take the Y2K bug for example. Many media reports were advising people to stock food, water and money since no computers were going to work after Y2K and therefore our whole society would collapse. It never happened. Sure, there were a few minor glitches, but most were fixed in no time and life continued on in the year 2000 with little more than a hiccup.
When you consider this, you should consider what else they are blowing out of proportion.
Many are blaming the media for being the cause behind much of the financial problems that the country is believed to be having, from the stock market to the real estate industry, not because the problems are that large, but because they are making them that large.
So, how do you know what's safe to invest in. Well for one, you never really know what is a safe investment. After all that is why there is risk to investing. But you can be more confident in real estate than many other options. The reason for this is that real estate is not going to completely disappear. Think about it. Even if the price fluctuates, a real estate investment fund will still hold substantial value, even in the worst of economic times. It's not like the land is just going to shrivel up and disappear. No, unlike companies that can close their doors and take all their shareholders funds down the tube with them, real estate will always have value, even in the worst of times.
If investing in real estate is new for you, you're not alone. There are plenty of people who are just making their way into the real estate market and need a little advice to make sure they are making the right trading decisions. This is where REITBuyer.com comes in to help. REITBuyer.com is a full service REIT broker that not only can help you manage your portfolio and online trading, but is also chock full of research and educational tools as well as charts, tables and programs that can help you learn about the REITs you are interested in and make sure you go into this in the right state of mind.
There always has to be a first time for everything. In this case, take a page from the book of Donald Trump, "Every day, you'll have opportunities to take chances and to work outside your safety net. Sure, it's a lot easier to stay in your comfort zone. In my case, business suits and real estate. But sometimes you have to take risks. When the risks pay off, that's when you reap the biggest rewards."
Tuesday, March 3, 2009
How to Add Investments to Your Portfolio Previously Allowed Only to the Rich and Institions: REITs
About REITs: Real Estate Investment Trusts
Real Estate Investment Trusts (REITs) were created in the 60's so that all investors would have access to income-producing real estate through the purchase and sale of liquid securities. Before REITs were created access to investment returns of commercial real estate equity was only available to institutions and wealthy individuals.
For over half a century, REITs have become an important part of the United States economy and investment markets. United States REITs have grown from ninety billion dollars to over three hundred billion dollars in the past decade and they have gained popularity all over the world.
During their early years, mortgage Real Estate Investment Trust dominated the industry, providing debt financing for commercial or residential properties through investments in mortgages and mortgage-backed securities. Interest in equity REITs which own and manage commercial properties was limited because of the requirements that ownership and management of assets remain separate. This restriction was lifted with the passage of the Tax Reform Act of 1986 which allowed REITs to both own and manage properties. Now, more than 90% of publicly traded United States REITs are equity REITs that own and manage commercial real estate. Most of their income is derived from rents owned by companies across the nation.
There are certain guidelines and standards in place that must be followed in order for a company to qualify as a REIT in the US. The Internal Revenue Code requires at least seventy five percent of total assets be invested in real estate which realize at least seventy five percent of its gross income from rents from real property or interest from mortgages. They must also distribute at least Ninety percent of taxable income to shareholders annually in the form of dividends.
Real Estate Investment Trusts (REITs) were created in the 60's so that all investors would have access to income-producing real estate through the purchase and sale of liquid securities. Before REITs were created access to investment returns of commercial real estate equity was only available to institutions and wealthy individuals.
For over half a century, REITs have become an important part of the United States economy and investment markets. United States REITs have grown from ninety billion dollars to over three hundred billion dollars in the past decade and they have gained popularity all over the world.
During their early years, mortgage Real Estate Investment Trust dominated the industry, providing debt financing for commercial or residential properties through investments in mortgages and mortgage-backed securities. Interest in equity REITs which own and manage commercial properties was limited because of the requirements that ownership and management of assets remain separate. This restriction was lifted with the passage of the Tax Reform Act of 1986 which allowed REITs to both own and manage properties. Now, more than 90% of publicly traded United States REITs are equity REITs that own and manage commercial real estate. Most of their income is derived from rents owned by companies across the nation.
There are certain guidelines and standards in place that must be followed in order for a company to qualify as a REIT in the US. The Internal Revenue Code requires at least seventy five percent of total assets be invested in real estate which realize at least seventy five percent of its gross income from rents from real property or interest from mortgages. They must also distribute at least Ninety percent of taxable income to shareholders annually in the form of dividends.
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