How to Get Involved in Business Real Estate
Many people want to learn how to make the big bucks when it comes to investments. Generally this means knowing how to get into commercial real estate and how to do it right. This is how people like Donald Trump made their fortunes. But are you ready to be the next Donald Trump?
For most people the answer is no. Not because they don’t want to be the next Donald Trump, but because they don't have the cash on hand to get started like Donald does. That's ok. You can start small. One way to start small on commercial real estate is through REITs. A REIT is a real estate investment fund. This is a fund that that works much like a mutual fund but in the area of real estate. You can purchase shares of this fund and then that money is used to purchase, build or maintain properties.
As those properties make a profit, you will get a good percentage return on your investment. By US law, 90% of the profit from a REIT has to be returned to the shareholders in dividends, so if a REIT investment goes well, there could be major earnings.
As you wonder if this is the right way to go for you, why not take on this quote from Will Rogers, "Buy land, they aren't making anymore of it."
That is a very true assessment! There is only so much land to go around and with a growing population, more and more people are going to want a piece of it.
While you may think this only impacts residential properties, if you think a little harder you will see how it could also have an impact on commercial real estate.
While all those people in the growing population will indeed need places to live, they will also need places to shop, have their hair done, buy cars, and for any number of other services that they expect these days. That means commercial ventures that are going to serve this growing population are going to need commercial real estate to work from. If you are a part of a real estate REIT that owns that property you can have a tenant that is paying you profits for years and years to come.
Beginning your venture in to commercial REITs is easy. Start by going to REITBuyer.com. This is a website that focuses specifically on REITs instead of all the other types of investments out there.
Now take a little time to research the REITs that are available. You can look into the portfolio of a REIT to see what type of property is in its holdings. Some are residential and industrial as well as commercial, so if you want just commercial, make sure to weed out the rest.
Next, you should take a little time to see what that REIT has done in the past. See if it has been steady (give or take a few tough market seasons) and if the area where they are located is a good market for future revenue.
If so, it only takes a few steps to purchase the REIT through the site and enjoy your first step into the world of commercial real estate.
Thursday, February 26, 2009
Wednesday, February 25, 2009
Profit From An REIT - Real Estate Investment Trust
What are REITs (Real Estate Investment Trusts)?
If you pride yourself on being an up and coming investor, you should make sure you know all of the investing options that are available to you.
While most people know of trading things like stocks and bonds, they may not know of the deeper levels of those things, such as REITs. REITs are Real Estate Investment Trusts. Essentially this is a company that purchases properties and then becomes a real estate management firm.
How you get involved in these investments is by giving them the funds to make those purchases and run them. Essentially, they will allow a certain number of investors to be a part of the trust (it is usually a limited number for each trust).
So where did REITs come from? Well the REIT was born in 1960 by congress. Before this time only those with major money were able to get into real estate investing. Everyone else had to play the regular stock market. So, they wanted to give smaller investors the chance to get in on the profit making market of real estate. With REITs instead of having to have the money to be able to purchase a whole property at once, an investor can get in to the market with just a percentage of the money buy buying one or more shares.
When choosing a REIT, it is important to realize that there are a variety of REIT styles. Usually a REIT sticks with one type of property. For example, there are commercial REITs that only deal with commercial real estate and ventures. They may purchase office space and rent it out to businesses. Another way to go is industrial, purchasing and maintaining industrial parks. There are also residential buildings that vary from apartment buildings to condominiums and even complete housing neighborhoods that are owned and operated by the REIT. If you know more about one kind of real estate than another, you may prefer to fund this style of REIT where you can invest in something you know about.
Understanding how REIT investments work is vital if you are considering going into this type of investment market. Here are some of the basics.
First, if a REIT makes money, its investors are going to make money. The way a REIT works is that as it makes taxable income, at least 90 percent of that must be paid directly to it's investors. That means as a shareholder, if the REIT is making any money, so are you!
When it comes to shareholders REITs run the gamut from small to massive, but even the small ones are not so small that they can't have any buying power. A REIT must have at least 100 shareholders.
When it comes to operations, REITs have a few major rules to follow. First, they are required to invest 75% or more of the money put into the trust in real estate ventures. Additionally, they have to be getting at least 75% of their income from monies made from the properties they own (i.e. through mortgage interest or rent)
If you are considering investing in REITs it is important to note that they are also a little different in tax structure. Since so much of the profit from a REIT is going to the shareholders, they are able to deduct that money from their taxable income. However, when you as in investor get your dividends you will be responsible for paying the capital gains taxes.
Before you invest, learn more. REITBuyer.com is not only a full service REIT broker, but also has research and educational information to help you get started and build your portfolio.
If you pride yourself on being an up and coming investor, you should make sure you know all of the investing options that are available to you.
While most people know of trading things like stocks and bonds, they may not know of the deeper levels of those things, such as REITs. REITs are Real Estate Investment Trusts. Essentially this is a company that purchases properties and then becomes a real estate management firm.
How you get involved in these investments is by giving them the funds to make those purchases and run them. Essentially, they will allow a certain number of investors to be a part of the trust (it is usually a limited number for each trust).
So where did REITs come from? Well the REIT was born in 1960 by congress. Before this time only those with major money were able to get into real estate investing. Everyone else had to play the regular stock market. So, they wanted to give smaller investors the chance to get in on the profit making market of real estate. With REITs instead of having to have the money to be able to purchase a whole property at once, an investor can get in to the market with just a percentage of the money buy buying one or more shares.
When choosing a REIT, it is important to realize that there are a variety of REIT styles. Usually a REIT sticks with one type of property. For example, there are commercial REITs that only deal with commercial real estate and ventures. They may purchase office space and rent it out to businesses. Another way to go is industrial, purchasing and maintaining industrial parks. There are also residential buildings that vary from apartment buildings to condominiums and even complete housing neighborhoods that are owned and operated by the REIT. If you know more about one kind of real estate than another, you may prefer to fund this style of REIT where you can invest in something you know about.
Understanding how REIT investments work is vital if you are considering going into this type of investment market. Here are some of the basics.
First, if a REIT makes money, its investors are going to make money. The way a REIT works is that as it makes taxable income, at least 90 percent of that must be paid directly to it's investors. That means as a shareholder, if the REIT is making any money, so are you!
When it comes to shareholders REITs run the gamut from small to massive, but even the small ones are not so small that they can't have any buying power. A REIT must have at least 100 shareholders.
When it comes to operations, REITs have a few major rules to follow. First, they are required to invest 75% or more of the money put into the trust in real estate ventures. Additionally, they have to be getting at least 75% of their income from monies made from the properties they own (i.e. through mortgage interest or rent)
If you are considering investing in REITs it is important to note that they are also a little different in tax structure. Since so much of the profit from a REIT is going to the shareholders, they are able to deduct that money from their taxable income. However, when you as in investor get your dividends you will be responsible for paying the capital gains taxes.
Before you invest, learn more. REITBuyer.com is not only a full service REIT broker, but also has research and educational information to help you get started and build your portfolio.
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