Saturday, February 28, 2009

REITs Are Like Mutual Funds

REITs – Real Estate with Liquidity

As many people these days are finding out while real estate seems like a wonderful investment, it can also be a painful one if your investment was in a piece of property that you own outright. Many people who had purchased investment properties or homes they were planning to flip for a profit were sent into bankruptcy in the recent housing market crash.

With that said, real estate has long been the solid investment option for those who like to put their money somewhere that it can see results but also remain stable.

So, how does one be able to still be involved in the real estate market and not be caught in that same trap? The answer is by purchasing REITs. A REIT is a real estate investment trust. This means it is much like a mutual fund in that a number of shareholders put money into the fund and that money is used to purchase, finance or manage real estate properties. The profits on the fund then come from mortgage interest, rent or lease moneys that come in.

For the most part a return on REITs averages 6-10%. U.S law dictates that 90% or more of the profits on a REIT go to the shareholders, and that makes them a pretty strong investment option.

The short version of what a REIT is, is a way to be a partial owner in real estate.

But with this said, one of the things that many people fear about real estate, being stuck with a property that will not sell in a down market, is not a problem here. Instead, REITs are totally liquid. If you think things are not going to go well in the future of your REIT, you can sell and get out and then put your money back in when things are looking up again. If you do this right, just this can be a big profit maker for you as you will be pulling your money out when the REIT is high and then putting it back in, and getting more shares, when the market is low.

If you are one of those people that think there's no way to know when the market will do well or fail and that it's all luck, that's not necessarily true. As Smith Barney said, "There's blind luck, dumb luck and then there's get up every morning at 5:30 and sweat the details luck. Few people actually stumble into wealth. It takes persistence, tenacity and a tireless work ethic. In the end, luck has little to do with success."

This is also the case here, by doing your own research and keeping on top of the market you will be able to make wise investing decisions. With the help of you will be able to do this. has all the tools and resources you need to be able to make wise decisions on what REITs to buy and also see when you need to sell. The added benefit by being a part of is that not only will you have that information at your fingertips, but also the ability to buy and sell your REITs as they are an investing real estate broker.

Do You Really Think Mutual Funds Are A Good Way to Invest?

The Internet – Your Best Friend in Investing

Are you still of the old fashioned school where you think the best way to invest in stocks, REITs, bonds or mutual funds is to call your broker and ask him to make a buy for you? Why is that? By now, you should have realized that we have come a long way and the Internet is a way that you can take on these investments for yourself.

Many people are reluctant to take their own investing into their hands through the Internet. Their reasons vary from thinking they don't know enough about their specialty market to that they can't make the same kinds of buys as a broker to thinking that their broker knows more than they do and will make sure they get in on a good deal. Let's look at each of these for a minute.

I don't know enough about my market.

If you are one of the people who think you just don't know enough about your market to matter, that's only because you aren't trying to. If you invest in REITs, for example, there are wonderful websites that allow you to learn everything you would ever need to know, plus keep on top of what is happening right now, like

Learning enough about your market to make wise decisions only takes a few minutes a day to do and can take you a long way in the profitability of your investment portfolio.

I can't make the same types of buys as my broker.

Think again. While your broker may have a really fancy computer system on his desk that he uses to make your purchases happen for you, chances are he is really using a program that is just as simple as one you could use to make the purchase. For example, is a complete brokerage firm of real estate investing that will allow you to buy and sell, as you need to, from the comfort of your own computer.

My broker knows more and will make sure I get good deals.

Unless you are sinking millions of dollars a year into your accounts, you’re not big enough for a broker to call you. If your broker hears about a great buy possibility, he is going to call his most prized clients first. Those are not the friendliest ones, but the ones who stand the chance to make him the most money. After all, this is business. This means you are likely not going to get that phone call and are going to miss out on the deal.

On the other hand, if you were signed up with a company like you would see those news stories that are going to impact the market as they come through and also be able to take a peek into the minds of the analysts on their blog to get the inside track on what is happening in your investment world. Then you can make the decision to act right away and reap the rewards.