by href =”http://www.flickr.com/photos/18548283@N00/3512689282″> slworking2 ztim21 question : What are the advantages of investing Proflex / disadvantages in REITs instead of actually owningpieces Properties ?
The cash flow right? or REIT dividends would be significant? What would be subject to market is a REIT? ! Thank you all for the info Best Answer:
reply Ryan J
It is an advantage of FPI in real estate. If you can not afford to buy a property, buy REITs. That’s all there. If you can afford to buy a flat in a good area … to do.
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http://www.investinreits.com/learn/investing.cfm
Might not be as risky as owning your own real estate for starters, but this site has a lot of good info.
REITs are professionally managed portfolios of real estate holdings, and they pay out the earnings on a regular basis. There are several advantages to buying REITs, including professional management, regular income, low initial investment requirements, and the choice of many different real estate options (e.g., shopping centers, business offices, etc).
While there are certain advantages to owning individual pieces of real estate, there are many risks as well. When you own individual properties, you’re responsible for paying the mortgage on it, even if you have problems with renters. In addition, you’re playing landlord unless you pay for someone to manage your properties. In addition, you have to worry about maintaining the property and paying taxes on it.
REITs are companies that own and operate commercial real estate. Commercial real estate is not always well correlated with private real estate. Case in point: housing prices slumped last year, while REITs continued their bull market.
The main advantage of REITs is that they are a paper asset, unlike owning the real estate directly which is a hard asset, and as such they are very liquid. You can easily buy and sell REITs, but cannot do so with real property. Also, you can hold REITs within tax-advantaged retired accounts, whereas you cannot with real property. Also, with REITs or REIT mutual funds, you can have your hand in many different properties, spreading the risk.
Remember that REITs are special companies who are required to pay 90% or more of their income as dividends to their stockholders. As such, they tend to be high-dividend stocks.
To read more about REITs, download my free book at http://www.invest-for-retirement.com and go straight to chapter 18.
Good dividend but less growth (unless they buy new building)
Stock Investing for Beginners
http://www.stock-investment-made-easy.com/index.html