First off, REIT stands for real estate investment trust, which basically means any company that owns or finances income-producing real estate. By purchasing equity in these properties, even average investors can invest in high-value real estate properties. That opens up one of the most valuable assets in America to, well, Americans.
Many U.S. residents are curious or interested in taking the first steps in investing, but still wondering how to invest in a REIT. This beginner’s FAQ will cover some of your most burning questions. Just remember, this isn’t mean to be legal advice, just a handy introduction to a potentially valuable investment.
Why do so many people want to know how to invest in a REIT? Why should I invest in real estate?
Commercial real estate alone is a $945 billion industry in the United States. And traditionally, owning real estate has been one of the main ways Americans build up wealth. However, with more Americans choosing to rent than ever before, many people still want to take advantage of the benefits that come from investing in real estate. Plus, by investing in an REIT, you can invest in commercial real estate properties you would never own under normal circumstances.
How long have REITs been around?
REITs were created by an act of Congress in 1960. They wanted to facilitate investments in large, income-producing properties by average American investors like yourself.
So how does investing in an REIT work? Is it like the stock market?
Yes and no. When you invest in a traditional company, you purchase a share of stocks. Depending on the value of the company, the value of those shares either rises or falls. In a real estate trust, you instead purchase equity. You can then reap a share of the income produced by that property.
What kind of properties do REITs own?
Most trusts manage commercial real estate properties likely to generate income, like shopping malls, data centers, hotels, office buildings, even health care facilities.
Have any more questions about becoming an investor in a real estate investment trust? The best way to get started is to contact trusted real estate partners in your area. Good luck!