About Real Estate Investment Trusts (REITs), (continued)
So what else are they all about?
Why do REITs sell properties?
Properties owned by the investment trusts are exited through a sale when it has been determined by management that the return on investment may be increased by selling the property and either purchasing another one or to strengthen the company balance sheet, have debt reduction, more liquidity or increase shareholder wealth by facilitating a share repurchase program.
Diversification involves buying into other Investment Trusts or properties specializing in apartment, industrial, self-storage, healthcare and other asset classes with a special emphasis on buying in different locations that utilize different professional management. All of this minimizes the impact that may be caused by similar Investment Trust systems or markets that will affect the rest of the investments negatively.
Excellent tool for Retirement Saving
Income including dividends derived will be taxed to the investor. As personal taxes it can be as high as 35% in taxes. However with the use of self-directed Roth or traditional IRA accounts as the pass through entities for the investments, all of the taxes may be saved and or deferred and used to compound investments through to retirement. Learn more at saving for retirement.
Mortgage Real estate Investment Trusts
This is a company that specializes in underwriting, acquiring and holding debt obligations guaranteed by real estate properties. They are essentially loan portfolios as opposed to ownership of the asset, as is the case with their equity counterparts holding real estate.
Hybrid Real Estate Investment Trusts
It is referred to as a hybrid when it has both equity and mortgage components. Although not as heavily favored by investment advisors as pure equity types, they are still attractive investment alternatives.
The advantages as described above are strong and make it a significant member of a secured diversified passive income investment portfolio. However to help place the right mix in its rightful fit in a high profit investment portfolio of real estate in emerging markets and bonds; an adept team to help mobilize this is tantamount, contact our adept team today.
