There is no denying that the appetite for real estate is at an all-time high due to demographics, Central Bank policy, and major Wall Street firms stepping into the real estate markets.
Today we will deep-dive into Real Estate Investment Trusts and if REITs are a good investment now. Investing in REITs can be a great way to incorporate portfolio diversification.
Today we will deep-dive into Real Estate Investment Trusts and if REITs are a good investment now. Investing in REITs can be a great way to incorporate portfolio diversification.
Real estate investment trusts or REITs own, operate, or finance income-producing real estate across many property sectors. The real estate investment trust is a way to invest in real estate passively.
REITs allow anyone to invest in real estate assets by purchasing individual company stock or through a mutual fund or exchange-traded fund (ETF).
Equity REITs are the most prevalent type of REITs. Equity REITs own or operate income-producing real estates like shopping malls, commercial real estate, health care facilities, apartment buildings, warehouses, office buildings, cellphone towers, and hotels.
The publicly-traded REITs are either index funds from prominent fund families like Vanguard, Schwab, and Fidelity, or niche REITs investing in only a real estate sector such as office space and self-storage, data centers, or malls.
Mortgage REITs (mREITs) only provide financing for income-producing real estate by borrowing money at low short-term interest rates and purchasing mortgages that pay more excellent long-term interest rates. The difference between the two rates is the Mortgage REIT’s profit. Mortgage REITs don’t own or operate real estate property.