Investing in Real Estate Without Buying Property
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You don't need to own property for real estate investing
Many people think that real estate investing requires you to own property. This can be discouraging for those who may not have enough capital to go out and buy commercial or residential property for a real estate investment. However, there is a way that you can get involved in real estate investing without owning property. You can do it through Real Estate Investment Trusts (REITs).
What is a Real Estate Investment Trust?
A REIT is a company that owns a variety of different income-generating properties. It doesn't matter what the property is--residential, commercial, warehouses, etc. A REIT may also include the financing end of real estate, such as mortgage companies. REITs are traded on the stock market, much like other securities. There are about 190 registered REITs that you can invest in. This will give you a chance to add diveristy to your investment portfolio by investing in real estate, but you won't have to come up with the capital needed to buy property. You can choose to invest in an equity REIT (owns property), mortgage REIT (financing property mortgages) or a hybrid REIT (which does a little of both).
Buying into more than one REIT
Much as you can buy sector mutual funds that offer you a piece of several difference companies in one particular sector, it is possible to purchase real estate exchange traded funds that allow you to dip into several REITs buy purchasing on ETF. The Dow Jones U.S. Real Estate IYR by iShares allows you to invest in 75 different REITs at once. This can be quite helpful, as it allows you to broaden your REIT base. However, you should be cautious about investing in something that is not terribly diverse. As long as you limit such funds to just a portion of your investment portfolio, it shouldn't be a problem.
Making real estate investing decisions
As with any investment, it is important to check into your decisions concerning real estate investment trusts. Is the REIT solid? What REITs are lumped into a particular fund? Also, check the fundamentals of the market sector in general. Real estate generally does well, but it is in a bit of a slump now. If you have the time to wait for the turnaround, buying now can get you a good price, and it is likely to grow in the coming years.
A real estate investment can make a nice addition to your investment portfolio. It adds diversity, and provides a relatively solid investment that is likely to grow. And, with help from a REIT, you do not have to own property to become a real estate investor.
More on REITs
- Real Estate Investment Trusts
Learn about real estate investing with an REIT. - Real Estate Investing ETFs
Options for ETFs, including REITs
More on Investing
- The Motley Fool
Learn about investing with help from the Motley Fool. - Help Your Child Learn Investing
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Learn about how to build a good investment portfolio.
starting REIT, any comments welcome.
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hi, i got ideas on your hub, thanks for the post!
Great Real Estate lens with lots of information here and well presented too!
informative hub, thanks for the the information.
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Really a nice posting. I appreciate it . Thanks a lot blogger .
Since 1976, Weichert Realtors, Craven and Company have been the leading real estate firm in Concord, NC.
I had heard of REIT but wasn't quite sure who it works. I'm wondering if your hub is still relevant in today's economy?
For those with the know-how, you could also use options - take an option to buy a property (but don't actually buy until it suits you), rent it whilst under option and then sell it at a later stage.
I know of a number of people who have "taken control" of properties in this way when, for different reasons, they have been unable to get a mortgage.
Nice hub, Thanks for sharing. A lot of people believe they need to own property to make money from Real estate and they believe they need to have a lot of credit or a lot of money to get started.
Again - nice hub.
Thanks
A very informative hub, thanks for the useful information.
hi im to the real estate world and i have been having trouble of couse. so are you talking about hub houses
ok no need to answer that ? i found out what it is.
Very good blog, alot of people think they need to own or buy with their own money to make money in real estate. This is not true, Thanks for sharing - keep up the good work!
Great blog, very informative. I always wondered what a REIT was...
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Hi, I would like to share this : I buy investment property and apartment buildings, so I am very careful to choose an agent who specializes in that niche. Now I own it. It is a real estate investment can make a nice addition to my investment portfolio
Regards
Victor
wonderful Real Estate lens and it very informative i will sharing ... thanks
boulder real estate 4 years ago
This is a cool post. I have a few clients that were struggling with wanting to get into real estate investing and a couple of them turned to REIT's. While it's not great for my pocketbook, good for them!
You've given some great pointers for people interested in an alternative strategy for investing in real estate.