Natalie Burnside, The Cobb Group brokered by eXp RealtyPhone: (843) 295-1178
Email: [email protected]
Email: [email protected]
Photo by Andrea Piacquadio from Pexels
A real estate investment trust (REIT) can be an attractive way to invest in real estate. It allows anyone to invest in real estate assets arranged in a portfolio. Currently, about 87 million Americans invest in these types of stocks.
A REIT is a company that operates, finances and/or owns real estate that produces income. It provides its investors with the opportunity to own real estate so they can access an income that is dividend based. Investors in REITs also have a hand in enhancing communities by helping them grow and thrive.
In addition to the fact that REITs are much like any other type of stock, they also tend to follow a methodical business model. The company leases space while collecting rent on the real estate it owns. The income generated by these actions is paid to shareholders.
In order to meet the qualifications for being a REIT, the company is required to pay out at least 90 percent of its taxable income to its shareholders. In many cases, REITs pay out a full 100 percent. Shareholders are required to pay income tax on their dividends.
In contrast, mREITs (mortgage real estate investment trusts) don't own any real estate directly. They earn an income on the interest the is generated when they finance investments.
The types of real estate properties that a REIT can invest in spans a range of options. These are categorized into 13 different sectors and include residential, retail, healthcare, timberland and more. While most REITs invest in a single sector, there are those that hold more than one type of property.
There are four general types of REITs. The most common are equity REITs. These operate and/or own real estate that generates income. mREITs focus on providing financing for real estate by originating or purchasing mortgage-related products.
Public non-listed REITs are registered with the SEC, but don't trade on the stock exchanges like the two previous types of REITs mentioned. Private REITs also do not trade on the stock exchanges. In addition, they are exempt from having to register with the SEC.
Investing in REITs is as easy as purchasing shares of a company that's listed on a stock exchange. Other options for investing in a REIT include buying shares in an exchange-traded fund or a mutual fund that focuses on REITs. Investors also have the option to invest in private REITs and REITs that are public but not listed on the stock exchanges.
While REITs have historically outperformed a number of United States benchmarks, it's important to speak with an investment advisor or financial planner who can provide guidance and targeted information specific to your location and goals.
Originally from the midwest, Natalie and her husband Brian spent many years following his career but knew they were forever home when they made it to the Lowcountry. During vacations on Kiawah Island, they would dream of retiring to the South Carolina coast. When an opportunity presented itself to move to Bluffton much earlier than they envisioned, it was a “no brainer” and has proven to be one of their family’s best decisions. The two things Natalie loves most about the area are the community’s welcoming attitude and the always changing, but consistently breathtaking, views from the Lowcountry bridges. “It seems that everyone you meet in Bluffton and Hilton Head loves their community and genuinely wants you to fall in love with it, too…whether it’s for a week of vacation or to plant your own long-time roots.”
