Monday, March 23, 2009

REITs - a Good Investment

Real Estate - The Wise Investment

In today's touchy economic climate many people want to be doing something to invest their money wisely, but are not sure how to do that. It seems every time you look at the business section all you see is more bad news about markets taking a tumble.

So, what is an investor to do? Well now may be a good time to take on an investment in something that is solid and has assets backing it up like Real Estate.

Sure, you're thinking that the real estate investment market has taken its share of hits. Yes, it has. But if you compare the hits it takes in a down market to the other mutual funds, stocks, bonds and options out there, you will see real estate is still the way to go.

For example, in one chunk of the market drop the regular stocks were down in a painful way. People then looked to see what the more stable commodities were doing. Even they were down. Utilities were down 4-5 percent. But at this same time real estate funds were down less than a percent. That should tell you something. Even when the rest of the investing building is crumbling, real estate is still a pretty strong corner stone.

Sure, some markets are still rather low for where most investors would like them to be, but if you look at this in a different way you may see the light.

While the funds may be low now, real estate is an asset. That means real estate will never completely lose it's valuable. That tangible piece of land or building will always retain some value. Therefore unlike the regular stock market where a bad day could wipe all of your money away, the real estate investing market will usually allow you to at least keep your investment, although you may not see as much profit as you would like.

How to Invest in Real Estate

The next thing you may be wondering is how to start getting invested in real estate. The first thing you need to do is your homework. You need to know what is best to invest in and how to get your money into those markets.

Begin by going to This is a website that is in the business of real estate investments and real estate investment trusts (REITs).

Unlike other brokerage firms that just want your money, they also want to make sure you know what you are getting into. The website is filled with information about REITs and the real estate market in general. This will give you a good base in the options that are out there and which ones you may want to consider purchasing.

Once you know which ones are the best to put into your portfolio, can take care of that part of the process as well, making the purchases for you.

After the purchase has been made, they will also help you keep up with your REITs and follow their progress in the weeks, months and years to come.

Real Estate Investments to See Real Profits

Many investors say they want two things in their investments – a return on their money and some security that their money will not be here today and gone tomorrow. When it comes to trading on the stock market or purchasing mutual funds, those are usually two things that cannot be promised. When you purchase stocks, you never know if the company is going to have a bad quarter, losing you a chunk of your investment or if they are going to fail altogether, taking your money with them.

The only place you can really be sure that you will not lose everything in a bad session is in real estate.

Even if the bottom falls out of the real estate market, real estate that has been purchased is an asset. So, while there may be losses in a major downturn, you won't lose everything. Often in this case if you were to hold on for a little while and be patient it will all bounce back and you'll be seeing dividends come in again like nothing ever happened.

There are two ways to invest in real estate. The first is to make a real estate purchase. For the most part this means having a lot of money in hand to be able to buy a piece of property or a building outright. For most people this is not a possibility as this means having tens to hundreds of thousands of dollars in hand to invest.

There is another option however. Instead, why not be a part of a real estate investment trust or REIT. A REIT is where you are a shareholder in property ownership. This means you will purchase shares that go into a collective pot that is used to purchase and maintain properties. These properties could be anything from commercial buildings that are being leased out to residential buildings that are rented out.

The way a REIT works is that as the real estate management group makes a profit, that profit will be given to you as a dividend. Laws dictate that at least 90 percent of the profits from a REIT have to be returned to the shareholders, so barring a major downturn in the economy you know you will get a return on your investment year after year.

That other 10 percent of the profit from the REIT will go back into the management of the properties or possible improvement or expansions that will give you even more return on your investment dollar in the future.

Unlike regular real estate purchases, there is another benefit to REITs. If you ever needed to pull some of your money out it is as easy as selling a few shares instead of having to sell a property and go through all those hassles.

Getting into the REIT market is also relatively simple. Just go to and you can research the REITs out there and even make your purchases in one stop, as they are an investment real estate broker as well.