Are REITs Right for You? 
Real
estate can be a very beneficial investment for people looking for income or
diversification. Of course, not all of us
have enough money, time, or "know-how" to invest in property and manage it
properly. This is where a Real Estate
Investment Trust (REIT) becomes so important. A
REIT is a company that buys, develops, manages and sells real estate assets. REITs allow
participants to invest in a professionally managed portfolio of real estate properties. In this sense, smaller investors can indirectly
own portions of many properties and receive the generated income. REITs are required to distribute the majority of
incoming cash flows to its shareholders, and because of this typically provide higher
dividends than are generally available in the market. One of the primary incentives for a
REIT investment is the low correlation of its value to that of other financial assets.
Because
of this, REITs possess low relative historical volatility and provide some degree of
inflation protection as well as overall diversification.
Other benefits that some REITs offer include:
-
Dividend
reinvestments at discounted prices
-
Partial
tax-deferral of paid dividends
-
Stock
exchange listing for added liquidity
Of course, we cannot guarantee
return of principle, but we encourage you to contact us if you are interested in achieving
a potentially higher income stream or are in need of some added diversification.
