Place Real Estate Investments in Professional Hands with REITs

REITs provide a way for investors to get involved in the real estate market without actually purchasing any real estate themselves. One of the big advantages of putting money into an REIT is that you are going to be able to take advantage of professional money management. Here are a few things to consider about REITs and professional managers

REITs

An REIT is a type of investment that is similar to a mutual fund. Instead of investing in stocks or bonds, the fund is going to use the money from the investors to invest in real estate. The term REIT stands for real estate investment trust. You are going to get involved in the trust and a professional money manager is going to use your money to purchase properties.

Professional Management

Investing in an REIT is going to allow you to put your money into the hands of a real estate professional. Typically, REITs have a large team of professionals at the helm. They know how to invest in real estate and do it profitably. Most individuals do not have the expertise that it takes to be consistently profitable in real estate market. Many people would like to benefit from the potential profits of the real estate market. However, they do not feel confident enough to purchase a property on their own. By utilizing an REIT, you can get involved with the real estate market even if you do not know the first thing about real estate. You are simply going to empower a real estate professional to handle everything for you.

Small Investment

Another advantage of getting involved with an REIT is that you are going to be able to invest a much smaller amount of money. If you decided to get involved in real estate on your own, you would have to come up with many thousands of dollars to purchase a property. With most investment properties, you are going to have to come up with at least 20 percent of the purchase price. In some cases, that can be even higher. Therefore, you are going to be putting a huge portion of your available funds into one property. With an REIT, you could potentially buy a few shares for a very small amount of money. 

Diversification

Another big advantage of investing in an REIT is that you are going to get diversification. When you are an individual investor, you are typically not going to own a large number of properties by yourself. Many real estate investors only own one or two properties. By doing this, you are subjecting yourself to a large amount of risk. The value of those individual properties could decrease substantially and you would lose money. With an REIT, this is not going to be the case. You can invest in an REIT and become a partial owner of thousands of different properties. The managers of the fund do their best to diversify the portfolio so that you will not lose a substantial amount of money.

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