Real Estate Investment Trust (REIT)

Benefits of Investing in REITS

There are many benefits to buying Real estate investment trust. Chief among them are:

Diversification

REITs own a multi-property portfolio having branched-out tenant pools and this lessens the risk of relying on a single property or tenant. For instance, if you own a station and it somehow closes down, its value would probably depreciate. The magnitude of such stand-alone risk is minimized once investment is done in a pool of properties via REITs. This is turn encourages the generally accepted business notion of investing in different types of assets.

Affordability

The investor of REITs enjoys the benefit of being a part of pool of capital, acquiring interests over much larger opportunities as compared to what he would achieve at his personal capital alone. For instance, it may not be available for an individual investor to afford a direct investment into a giant asset such as shopping malls or plazas. However, he/she can get to invest in it via REITS in small chunks.

Liquidity

Investment via Real estate investment trust offers the added benefit of liquidity – the comfort of converting assets into cash. Unlike shares, it is easy to purchase and sell real estate investment. If the price of the REITs you invested in goes up by next day, you can login to your brokerage account and take care of your position in an instant.

High Yield

During periods of dynamic economic activity, the appreciation in value of real estate is reflected in REIT stocks. For most investors, the major attraction of REITs has been the capital to compound in the shape of dividends in the REITs structure.

Transparency & Flexibility

The whole process of purchasing and selling a REIT is clear and flexible. REIT investors can easily get access to information concerning REIT prices and get involved in trading throughout the day.