Sunday, March 22, 2009

"Furnished Rentals" - Are REITs a Good Investment?

"Furnished Rentals" - Are REITs a Good Investment?

We hear this question a lot. Part of the reason we're hearing it may be because of the tough patch the economy has had lately. Another part of the problem may be because people are just not sure of what they are and why they should buy into them. Here's a quick look at both of these topics.

What is a REIT? A REIT is a real estate investment trust. This is essentially a fund that supports real estate construction or real estate management. Basically, if you purchase shares in a REIT, that money will go into a pot that will be used to buy, build, manage and maintain real estate investments.

How do you make money? Once you have purchased a share in a REIT, at least 90 percent of the profits that are made by that REIT go right back into the hands of the investors in the form of dividends. Think of this as stock market dividends but getting a higher percentage back from profits than you ever would with other stocks, bonds and mutual funds.

Why should you buy in to a REIT? This answer is simple. Real estate is considered the strong steady market. Even when the rest of the market is crumbling, it usually keeps a pretty good foothold on things. Part of the reason for this is that real estate is an asset, and a tangible one. While values may fluctuate, property always is worth something.

For example, many real estate investment trusts have seen returns of 6-60 percent, which is as good if not better than stocks and other investing funds. So, if you know when and where to buy, there is a chance to make a lot of money.

But what about the bad economy? This is a question a lot of people are asking. They are worried that if they get into purchasing REITs now they are going to lose more money if the market tumbles again. While that could happen, the chances are that even if there were another downturn, your investment would still be pretty stable. Remember, you are still working with a tangible investment of property.

It is also interesting to know that REITs are interesting enough to get the attention of some of the major private firms such as Tishman Speyer Properties. This shows not just small investors are interested in this type of investing.

Getting into the REIT market is not that difficult. It takes little more than some time to get yourself acclimated and then learn about what it is you want to buy before you make a purchase. Start by logging onto The site is chock full of all the information you need to learn about REITs and study the past performance of many REITs as well as get a good idea of the future possibilities. Once you are ready to buy, they are also a full service investing real estate broker that can complete that transaction in the same place.

Attain Stability By Investing in Real Estate - "Look at Furnished Rentals"

If you have been watching the regular investment world like the stock market and mutual funds, you may think you don't want to let your money get anywhere near those fund stealers. In recent months you have seen stocks plummet. Many companies have been completely wiped off the map and all those investment funds with them.

But at the same time, you would love to have an option to make a little more money with that extra cash that you have. What can you do? This may be a time to look into real estate investing.

Historically, real estate is a pretty safe investment field. Many people see the news articles as of late about the real estate market problems. Sure, there are fluctuations, but over the long term, real estate is a wise investment. When other markets tank and fall apart, real estate tends to be the constant that holds strong as some of your other investments may be failing.

Additionally, if there were to be a complete market downturn, while your real estate investment may lose some of it's value the important thing to remember is that with real estate you have a tangible asset that will always have worth. That is much more than you can say for your stock certificates.

While you may not want to go 100% into real estate, if you are building a well-diversified portfolio, you should try to have at least 10-20% of that portfolio real estate related. This will give your investments a strong backbone that helps you in case you need to hedge against a bad day on the market.

The best way to get into real estate investing is through REITs or real estate investment trusts. These are essentially real estate development or real estate management groups that want to purchase, build and then maintain property units. These could be residential like "furnished rentals", industrial or even commercial real estate ventures.

Instead of purchasing a piece of property outright, you will purchase a share in the group that is doing the purchasing and maintaining. In return, as they make profits, you will get a portion of those profits sent to you as a dividend. As a matter of fact, REITs must return at least 90% of their profits to their shareholders. That means if the REIT does well, you are going to get a great return. Even in a moderate year you will likely get a good return.

Additionally, REITs are generally constant and stable as once people rent homes, business buildings, etc, they tend to stay there, meaning the profit will keep coming in year after year.

Getting in on the REIT game is not too difficult. Begin by going to a website like They have everything you need to add this type of investment to your portfolio. From the information you need to begin the process and research the REITs out there to being able to make the purchases for you, they can do it all as they are a real estate broker as well. Once you have made the purchase, you can even use their tools to monitor your investments and keep an eye on how that new portfolio is doing.