Monday, January 26, 2015

4 Types of Real Estate Investment: Part 2

One can invest in real estate in a variety of ways. Listed below are two types of institutions that cater to property investors: real estate investment groups and real estate investment trust, or REITs.


Real Estate Investment Groups
The mutual funds of property investing: through investment groups, an investor can purchase rental units owned by a developer or other company. The investor’s money is pooled into a mutual fund made up of purchases by other investors; as such, the investor becomes part of the investment group. The fund, overall, is used to maintain and operate the units. Unlike in a traditional rental setup, the developer or company, in this case, functions as the landlord, attending to maintenance, advertising, and tenant relations whilst the lease remains under the investor’s name. In exchange for these services, a certain fee is deducted from the monthly rent given to the investor.

REITs
'REIT' stands for real estate investment trust. Often referred to as "real estate stock," a REIT is a company that owns, operates, or invests in real estate, from condominiums to warehouses, hospitals, shopping centers, hotels, and other types of property. REITs are traded on major stock exchanges, but they may also be public, non-listed and private. Investors can buy highly liquid shares from publicly traded REITs. As shareholders, they benefit from yields in the form of dividends. It's an optimum alternative for investing in real estate: through REITs, investors don’t have to own and maintain any actual property.


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