A Real Estate Investment Trust is a device that permits you to invest in real estate and property but without the usually hassles associated with purchasing such property on your own. A real estate investment trust is a system where a group of investors collectively gather their funds into a legal trust and invest in various forms of real estate. If you've ever heard of other investment mechanisms such as mutual funds, you'll understand the way real estate investment trusts are supposed to work. A real estate investment trust may also be known as a REIT and a REIT invests in different types of property.
Real Estate Investment Trusts (REITs) is an investment trust where many people invest their money in commercial and residential real estate businesses. The trust manages and possesses many commercial properties and mortgages. The trust also invests in other types of real estate. Real estate investment trusts shows the best characteristics of both real estate and stocks. Though a variety of property types are there, most of the REITs concentrate on any one of the property types only. Those specializing in health care facilities are called the health care REITs. The different types of property that are invested in may be residential or commercial or even for leisure purposes. Simple REITs may invest in property as a simple as an apartment block or as complex as a group of hotels and leisure parks. Some real estate investment trusts even own shopping centers and movie theaters and it all depends of the purposes of the people who initially set up the real estate investment trust. Different types of REIT's exist and some of these trusts are private in nature. A number of these Real Estate Investment Trusts are public and can be found on stock exchanges such as the Pakistan Stock Exchange. Real Estate Investment Trusts are broadly classified into three categories - equity, mortgage and hybrid. The first category involves the ownership and management of income producing real estate. Mortgage real estate investment trusts offers money directly to real estate owners by acquiring loans or mortgage backed securities. The third category not only owns properties but also provide loans to real estate owners and operators. The trust's main advantage is that it helps a person to select an appropriate share to invest on from a variety of group rather than investing on a single building or management. In recent times REITs have increased in popularity due to a different number of reasons. Some people prefer Real Estate Investment Trusts because they are associated with factors that they can easily understand. Some people prefer REITs because they are identified with development and growth. Others simply make investments for certain reasons which are often driven by emotional factors. Statistics have shown that some relations exist between the prices of stock and the prices of real estate and profitability of REITs may easily be determined by monitoring for such statistics and varying volatility of stock markets in a particular region. Real Estate Investment Trusts are broadly classified into three categories - equity, mortgage and hybrid. The first category involves the ownership and management of income producing real estate. Mortgage real estate investment trusts offers money directly to real estate owners by acquiring loans or mortgage backed securities. The third category not only owns properties but also provide loans to real estate owners and operators. The trust manages and possesses many commercial properties and mortgages. Though a variety of property types are there, most of the REITs concentrate on any one of the property types only. Those specializing in health care facilities are called the health care REITs.
0 Comments
Leave a Reply. |
|