Investing in a Real Estate Investment Trust

money and graph imageThere is a common misconception when it comes to taking part in real estate investing and that misconception is that an individual must be a “big money player” in order to wheel and deal in property. This assessment is a rather inaccurate one as there are a great many opportunities available to those who only have a modest sum to invest. (And, no, this does not refer to those wild over the top opportunities that are available on late night infomercials!) If there was a solid way to invest in real estate with a limited amount of capital it would involve investing in a REIT – a Real Estate Investment Trust.

For those not familiar with what a REIT entails, probably the best description of it would be sort of mutual fund that invests in properties. That is, the REIT will involve a multitude of properties and interest will be paid on the success of these ventures. The way in which money is earned on a REIT involves the purchase and sale and/or management of property, and rental income (equity REIT); the lending of money for real estate purposes (mortgage REIT); or a combination (hybrid REIT).

So, instead of venturing out into these investment options on your own you can invest in a collected managed portfolio of these ventures in the form of a REIT. Again, this is no different than a mutual fund and comes with relatively low risk and low initial capital investment. Of course, you could also invest big as well as seek aggressive and volatile REITs, but the choice is up to the investor.

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