I recently read an article by Cyndi Barnett in the September 2011 Premier Agent Magazine that discussed REITS (Real Estate Investment Trusts) and Investors. Her article explained that this may be a great time to get into a REIT because of the challenges with selling commercial and residential real estate in today’s market. REITS are a way that you can purchase the great opportunities that are in the market right now and not have to manage the property yourself. This way you can get into the commercial real estate sector without the hassles of property management. From a REIT you could turn an investment opportunity into a great extra income through property value increase and a montly rental. A REIT gives you fractional ownership of a real estate portfolio. The portfolio usually includes some commercial properties, apartments, offices, and can include resorts and golf courses, but there is no minimum so you can own homes as well. Investors own common shares in the REIT. It is a REIT and not a corporation because a REIT doesn’t get to decide what to do with the after-tax profits. It must pay out 90% of it’s taxable profits as dividents. So REITS do not pay corporate income taxes. There are different classes of REITS to check out if you are interested. Some REITS are traded while others are not. REITs can offer diversity to your portfolio. Although you reduce the income on each property because it is shared, the risk of the ownership is also shared. In Cyndi’s article she credits Peter Montoya Inc., with the information and this information should not be construed as investment, tax or legal advice. If you decide to diversify your real estate portfolio, you should consult with a competent professional for guidence.
If you are looking for a professional Realtor to help you with purchasing or selling real estate, please call RREA at 281.288.3500 and ask for an agent.
