What\u2019s a better investment, buying a rental property or investing in REITs? The average REIT returns have been more than 10 percent annually<\/a> over the last 20-30 years. <\/p>\n\n\n\n This makes investing in REITs a very attractive investment. They\u2019re stable and reliable, which is perfect for any type of investor who seeks to grow their money.<\/p>\n\n\n\n Read on to find out more about REITs and how your money can grow using these type of investments.<\/p>\n\n\n\n\n\n If you\u2019re not familiar with REITs, we\u2019ll go over the basics. A REIT is a real estate investment trust. It\u2019s a broad brush stroke to describe investing in a real estate that\u2019s very similar to investing in a mutual fund.<\/p>\n\n\n\n A company has real estate assets like mortgages or properties, and these funds offer ownership to investors. You can put your money in real estate portfolio like you would a mutual fund.<\/p>\n\n\n\n These REIT companies generally have income-generating properties like condos, commercial space, rental properties, or a combination of them. The REIT company has income from these properties, which is then distributed to members. That\u2019s your share of the profit.<\/p>\n\n\n\n What makes REITs a wonderful investment is that you\u2019re technically a shareholder in properties without having to deal with the typical issues property owners have to manage. You don\u2019t have to worry about advertising properties, finding the right tenants, property taxes, building maintenance, improvements, and landlord\/tenant law. You also don\u2019t need to be concerned with , either.<\/p>\n\n\n\n As you dig into REITs, you\u2019ll find that there are several different types to REITs you can invest in.<\/p>\n\n\n\n Mortgage REITs, or mREITs for short, finance real estate deals that will produce income. They purchase the mortgage or securities from the bank that originated the loan and make money on the interest. If you\u2019ve ever owned a home and had a sudden switch in mortgage companies, odds are it was a part of an mREIT.<\/p>\n\n\n\n These are real estate investment trusts that are traded on stock exchanges. Since they\u2019re publicly traded, they are subject to strict financial requirements and regulations. The Security Exchange Commission oversees publicly traded REITs.<\/p>\n\n\n\n Since they\u2019re regulated, there will be higher fees and slightly lower returns. Before you get down on the regulations, you have to realize that the regulations also protect you as an investor and keep these REITs as a low-risk investment.<\/p>\n\n\n\n These REITs meet all of the requirements of the SEC, but they\u2019re not listed on a stock exchange. Even though they\u2019re not listed anywhere, they are still a good option because they meet all of the tough requirements to be listed. They\u2019re registered with the SEC, too. They\u2019re just not traded publicly.<\/p>\n\n\n\n Private REITs are not regulated, nor are they listed publicly on the stock exchanges. They\u2019re also not held to the same regulatory standards as a public or non-listed REIT.<\/p>\n\n\n\n You have to be very careful about private REITs. While the average REIT returns that are private may be more than the other REITs, there\u2019s a much higher risk involved.<\/p>\n\n\n\n Not all private REIT companies are created the same, and some might just want to rip you off. The Financial Industry Regulatory Authority issued a warning<\/a> to investors about these types of companies. <\/p>\n\n\n\n Now that you know what REITs are all about what else do you need to know about them? A lot.<\/p>\n\n\n\nWhat is a REIT?<\/h2>\n\n\n\n
Types of REITs<\/h2>\n\n\n\n
Mortgage REITs<\/h3>\n\n\n\n
Publicly Traded REITs<\/h3>\n\n\n\n
Non-Listed REITs<\/h3>\n\n\n\n
Private REITs<\/h3>\n\n\n\n
What You Need to Know About the Average REIT Returns<\/h2>\n\n\n\n
REITs are Simple but Complex<\/h3>\n\n\n\n