Why should you invest in REITS today? This article will explain the pros and the cons of investing today in REITs. This way you can make your own decision .
With rising Florida real estate sales, many people looking to invest are starting to wonder if Real Estate Investment Trusts are once again a potential opportunity. Home sales have gone up for the past six months in a row, homebuilding price indexes are rising and investors are turning optimistic. Is it really a good time, though?
What are REITs?
REITs are Real Estate Investment Trusts. These trusts invest in property then sell shares to people or businesses. If the REITs make a profit, that profit is split between shareholders as dividends. Many investment trusts cover a full portfolio of Florida real estate and other real property, rather than just one property.
In the past, they’ve been incredibly popular because they trade like stock and dividend yields are normally at the top of the market.
Not All REITs Are Created Equal
It’s important to remember that real estate investment trusts come in different shapes and sizes. As well, REITs report rental income, rather than sales, as revenue. Keeping rental income in mind, it becomes obvious REITS with long-term leases and high occupancy rates are generally better than others to invest in.
Also, the higher the occupancy, the easier it is to raise rental rates (although this is probably not good business at this time due to the current real estate market).
Investing in REITs
If you’re thinking of investing in REITs now, don’t forget that they may only benefit in a particular market. For instance, many individual investors are purchasing unfinished homes at steep discounts, investing a little more to finish the homes and then renting them out. As most real estate agents, blogs, articles and magazines will tell you, the rental market is doing quite well, so this may be a viable option for you.
No matter what type of Florida real estate you’re thinking of investing in, however, remember that any type of investment is risky. Is it time to invest?
Ultimately, only you can make that decision. Do your research, check your funding, then – and only then – make an informed decision.
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Article by dlasley104