Saturday, February 28, 2009

An Investment For Your Trust Fund - REITs - Real Estate Investment Trusts

Now is the time for Real Estate Investment Trusts

If you have been watching all the shifts in the investing markets, you may be a little worried about putting your money into any of them right now. Things have been falling and falling, how do you know where it will be safe to put your cash?

Perhaps it's time to look at some of the other investing options out there like real estate. I am not talking about running around and buying up any extra lots of property you happen to see around you. That comes with a lot of responsibilities and major outlay up front. Not only do you have to have the money to purchase the whole property, but you also have to be able to take care of it and maintain and manage it after the fact. This is a lot to ask for in an investment.

Instead, you may want to look into another type of real estate investing, real estate investment trusts. Real estate investment trusts or REITs are funds where you purchase shares of the investment and a real estate management group of real estate development group uses that money to purchase, build or maintain property ventures. You essentially fund a portion of a property acquisition and management group.

In return for your investment, you will be paid a portion of any profit that the company makes, much like a stock dividend.

While you may be wondering how wise it is to consider real estate in today's tough market, this is exactly why it may be a good time to look at a little more investing. Here's why. Sure, there has been a tough time for the markets. Lending has dropped, defaults on properties are on the rise. We're in tough credit times.

But now let's look at the positive side of things. Most think the slide has slowed and will soon be stopping. Add this to the fact that those capital markets that REITs use to get their funding for expansion and other purchases are low and that means the chances for REITs to get the capital they want to expand has dropped, for now. While you may think this is a bad sign, the truth is this is a time when the value of REITs is lower, meaning you can get in at a lower price. As things settle and go back to normal, your profits will go up and you will see an even greater return on your investment.

This is the time to log onto a website like and find out what REITs are out there, what they are selling for and get yourself in on this low tide so you can enjoy the ride when the financial wave picks up again.

With the other option being putting all of your money away and seeing no growth, what would you prefer?

Money Making Guru Robert G. Allen may have said it best saying, "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case."

Don't Worry About Your Funds When You Invest In REITs

REITs – Buy Now, Sell High

With so many people panicking after this past year's investment woes, there are some great deals to be had in the investment world. One of the best ones out there is in the real estate arena.

A lot of people are reluctant to put out any type of money into investments right now, thinking that since it's a bad time, things must be getting ready to get worse and worse. Well in real estate, this is not possible.

Think about this for a minute. Unless it is going to sink into the ocean or completely disappear into a black hole, the property behind a real estate investment will always be around. Sure, it can lose money and have a tough time, but it will be around and still have value.

Another thing to keep in mind is right now, as many other investors are doing what you are doing and worrying, those who move forward and make a buy will be the ones who have the most to gain as the market starts to rise again.

It's like Albert Einstein said, "In the middle of every difficulty lies opportunity". While he may have been talking about science, it also works for the world of economics and investments. Sure we are in the midst of a difficult economic time when it seems every stock, bond and mutual fund has dropped through the floor and that any investment is doomed to fail. But, what if you look at the opportunity side of that. If you look around, the real estate market has bottomed out for the most part. That means the current opportunity is in investing in more of it and seeing a return on that investment.

Now that I have you thinking of opportunity, you may be thinking there is no way you will be able to afford purchasing properties right now. No one said you had to buy properties outright. Instead, why not purchase shares of property? This can be accomplished through real estate investment trusts or REITs. Being a part of a REIT allows you to purchase shares of a real estate development or real estate management company and still be in on the market without having to buy a whole property yourself.

In a REIT when the management group profits (through leases, rent or mortgage interest) at least 90% of that profit must be passed on to the investors. This will come in the form of a dividend. In many cases you will see a 6-10% return on your investment every year, as that is the average. In some years you may even see your real estate out perform the stock market.

Investing in REITs is easy. They are publicly traded and you can go to a website like to research the REITs you are interested in, look at their past, possible futures and even make the purchase all in the same place, as they are an investing real estate broker.

We're at a point in the economic tide right now where it's either time to make a move or stay out of the game. Only those who play can win.