Women walking on the Magnificent Mile

5 Reasons to own REITS

Women walking on Michigan Ave.

5 Reasons to own REITS. Women today are making more money than they did in the past. It’s important to learn how to invest for the future. Taking time off to care for loved ones has always been a priority, for that reason we may fall behind in our investment goals compared to men. If you’re waiting to know everything before you start investing, you’ll never start. Investing can be overwhelming and confusing. There’s a wrong way and a right way to get started, together we will make our way through financial jargon one investment vehicle at a time starting with REITS.

What are REITS?

If you like real estate but you don’t like the thought of being a property manager, then you’ll like Real Estate Investment Trust otherwise know as REITS. REITS provide a way for individual investors to own a share of an income producing property. REITS can be purchased like a stock or through an Index Fund or REIT ETF, instead of owning stock in one company you can own multiple companies that invest in a specific sector of real estate for diversification. For example, you can purchase a REIT that invest in hospitals, shopping malls, hotels or rental properties just to name a few.

To qualify as a REIT, the bulk of the assets and income must be tied to a real estate investment and must distribute ninety percent of its taxable income to shareholders as dividends. As a stockholder of a REIT, you earn a share of the income produced by the real estate investment without having to buy or finance a property. Income is produced by leasing and renting the property. The more shares you own the more dividends you get paid, and REITS normally pay out higher dividends than other funds.

REITS are easy to buy and sell, some can be purchased for as little as twenty dollars. REITS can hold hundreds of companies when purchased as an Index Fund or ETF. Diversification within the fund can reduce risk. Many investors take their dividends and reinvest to buy more shares.

5 Reasons to own REITS

  • REITS are a great way to invest in real estate without purchasing a property.
  • REITS pay dividends.
  • REITS are easy to buy and sell.
  • REITS can be purchased just like a stock.
  • REITS add diversification to your investment portfolio. are easy to buy and sell.

If you’re investing, that’s great! If not get started. Investing is now easier than ever, there are commission free Apps like Robinhood and M1 Finance that allow you to execute trades for stocks, bonds and exchange traded funds for free on your phone. Other brokerages such as Vanguard, Charles Schwab and many others now offer apps that you can download to purchase and trade stocks.

REITS are just one of many investment tools that you can use to grow your money. As a reminder no investment is without risk, please do your research before investing. Check out my favorite investment resources; Seeking Alpha, Yahoo Finance and Vanguard.