A real estate investment trust is an investment fund that invests in income earning real estate properties. The trust comprises of various share holders who invest partly in one or more investment properties of the trust and are rewarded with the share in the dividends, when the trust makes money on those properties.
The REIT is like any other investment program for example, putting your hard earned money in stocks, mutual funds. Here you invest in the collection of real estate properties that a REIT have.
REIT are very dynamic entities that invest proactively in in any property that gives them a healthy return on their investment for their shareholders.
The target of their investments could be warehouses, apartments, retail shops, data centres, mobile phone towers and hotels. Some REIT like specialize only in a particular type of property while others like to diversify their investments on every real estate that fetches them handsome returns.
The business model of the most of the REIT is very simple, easy to understand even for the laymen, who usually get bogged by the complex terminology and details mentioned in any investment program. They purchase real estate in large volume, lease them out and earn the money through the monthly rents. The profits incurred through these rents are then shared with the share holders.
REIT have been mostly consistent and reliable in regards to the returns on the investments of their share holders. Their performance has been far better than other popular form of investments like stocks, bonds and mutual funds. Best part is that with a listed and reputed REIT company, investors can be more assured of their investment and they do not have to do the heavy lifting, finding new clients, managing those properties.
There are three types of REITs
Equity REIT: This is the most popular type of REIT, where the trust invests in income generating properties, lease them out on rent, collect rent and distribute the profits among share holders.
Mortgage REIT: In this investment income is earned through mortgages. Trust lends the money to the property owners and earn money through the monthly instalments paid.
Hybrid REIT:As evident from the name, it is the mix of the equity and mortgage REIT.
If you want to invest in a popular REIT company then American Made Home Solutions can definitely help you with your investment goals and put you across to the best and most reputed REIT companies and their best investment programs.
