Vanguard Properties
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.
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.
Besides the fact that REITs are much like any other type of stock, they also 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. Most times, REITs pay out a full 100 percent. Shareholders are still 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 generated when they finance investments.
The 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.
REITs have historically outperformed several United States benchmarks, but 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.
Selina Zhao is a tech savvy real estate agent who brings over the top-notch marketing strategies, presentation, and negotiation skills to her clients. Selina always stays on top of the real estate market trends and stats. She applies strategies into different market situation and empower her clients to achieve their ultimate goal. During the first year of her real estate career in the Bay Area, she achieved an impressive $22.8M in sales. Selina’s experience on real estate sales ensure her clients get the care and attention they need as they make the crucial decision of buying and selling properties. Selina is vowed to provide excellent service, communication, and always an advocate for her clients.
Selina loves real estate, her career blended in perfectly to her daily life, and she loves to help others to achieve their American dreams. She works restlessly to get the work done. Immigrated from mainland China in 2007, graduated from University of Miami, Selina established her own online marketing company and her real estate career in Miami, Florida before moving to San Francisco in 2017. Her soul of entrepreneurship and cares for others encouraging her to pursue to be the best in the industry. Selina is also a former Miami HEAT video producer, who witness the team winning their 2012 NBA championship at the courtside.