Types of Equity Real Estate Investment Trusts

Posted on Jun 27 2018 - 7:18pm by Admin

Realty Property AgentThere are various types of property investment. Real estate investment trusts (REITs) are one way of investing in the property market, and it has multiple subtypes. Equity REITs are among the popular ones.

They allow you to buy into property shares and generate income from rent or selling them, which is distributed to you in the form of dividends. Equity REITs require due diligence to get handsome returns.

It is hence prudent to get a real estate broker in Littleton, CO, to assist you when buying into an equity REIT. Here are some of the types of equity REITs your broker might recommend investing in.

Residential REITs

Residential property REITs come in the form of an apartment, multifamily and individual buildings for rent. Some companies have an in-house department to manage the rental properties, while others will outsource this task.

Residential equity REITs give investors an opportunity to invest in the volatile and overcrowded residential property market, which sole investors would find very hard to penetrate.

Retail REITs

With a retail REIT, you invest in properties for rent to retailers. Retail REITs are very profitable since, unlike residential properties, they have long-term clients who provide a constant profit. Though the REIT comes with minimal risk and high dividends, it is more costly than others to buy into.

Industrial and Office REITs

These trusts invest in renting industrial and office spaces. The stability these tenants offer make industrial and office REITs very lucrative since they also sign long-term contracts.

The main downside of the long-term lease is that you might not be able to adjust your rent according to the current market changes and in most cases might incur losses.

Compared with other forms of REIT investments, the examples above perform better in low-interest rate markets. The broad range of properties covered in equity REITs also assures you of ever-present opportunities. They will hence be your best choice for making profits in the property market.