Real Estate Investment Trusts are attractive to investors for various reasons. REITs have high levels of growing current income. They also have the opportunity for long-term growth. These are the basic characteristics of commercial real estate. Commercial property for lease Westchester NY services has experts to help you decide if you should invest in REITs.
Who invests in REITs?
REITs appeal to investors of all ages. Today, many different types of investors use REITs to help achieve investment goals. These goals can range from dividends, liquidity, diversification, transparency, and performance. It’s possible to invest in REITs directly, or through mutual funds. Other types of REIT buyers include pension funds, endowments, foundations, exchange traded funds, and bank trust departments.
What do REITs offer investors?
The most common factors that REITs offer investors are:
• High dividend yield: produce a continuous flow of income through various market conditions
• Income and long-term growth: provide competitive rates of return; these complement the returns from other stocks and bonds
• Professional management: REIT managers have substantial and professional experience in real estate
• Liquidity: REIT shares that are publicly traded are converted into cash since they get traded on major stock exchanges
Why invest in REITs?
You can count on REITs being total return investments. If you invest long-term, total returns of REIT stocks will likely be slightly less than returns of higher risk and high-growth stocks. But, they’ll be somewhat more than the returns of lower risk bonds. Furthermore, REITs are legally required to distribute at least 90% of their taxable income to their shareholders. This means that REITs tend to be part of companies that are paying the highest dividends. Rental rates have a tendency to rise during inflation periods. This means that REIT dividends are often protected from the long-term damaging effect or rising prices.
Types of REITs
The field of Real Estate Investment Trusts has a diverse profile. REITs are classified as either equity or mortgage. Equity REITs generally operate and own income-producing real estate. A major difference between Equity REITs and other real estate companies is that a REIT needs to obtain and develop its properties mainly to operate them as part of its own portfolio. This needs to be done rather than reselling them once they’re already developed. Mortgage REITs, however, directly lend money to real estate owners and operators. They also extend credit indirectly through gaining loans or mortgage-backed securities. Mortgage REITs generally extend credit solely on already-existing properties. Moreover, many mortgage REITs manage their credit risks and interest rate using securitized mortgage investments and derivative strategies.
Commercial property for lease Westchester NY
Real Estate Investment Trusts own and manage many different types of property including shopping centers, health care centers, office buildings, hotels, and more. If you’re looking to buy REITs, the experienced team at the Rakow Group can guide you through every step of the way. Contact commercial property for lease Westchester NY services for any questions you have related to commercial real estate and REITs. Call us at the Rakow Group today at (914) 422-0100.