Real estate investment trusts are becoming increasingly popular, and as many as 45% of US households now own shares in REITs.
REITs are companies that own income-generating real estate across various sectors. A real estate investor can purchase a share of a REIT, and will then periodically receive a portion of the income from these properties based on their ownership.
So should you invest in REITs? Let's take a look at some of the key benefits of doing so to help you decide.
Liquidity
Investing in real estate can be a great choice, but it also comes with drawbacks. One of the most notable is the liquidity. If you own a house and want to cash out on your investment, it could take weeks or even months.
REITs are a way to invest in the real estate market and you can cash out at any time. These real estate shares can be bought and sold on various exchanges with ease. If you want to sell yours quickly, you shouldn't have much trouble.
Diversification
As an investor, you should work on diversifying your portfolio. This helps reduce risk and exposes you to different assets, which can help you maximize your profits.
REITs are a great way to add small-ticket real estate to your portfolio. Due to the high price of traditional real estate, most investors can't form a very diverse portfolio just through real estate. REITs are far cheaper, so it's easy to invest in multiple ones throughout different sectors.
For far less than the cost of a single-family home, you could invest in REITs that cover apartments, condos, retail properties, offices, warehouses, and more. This kind of diversification makes REITs more appealing to a lot of investors.
Choice
REITs are highly accessible, and there are plenty to choose from. Some REITs invest exclusively in equity, while others offer debt-based investment opportunities. You can consider your investment strategy and goals to help you decide on the most suitable REITs for you to invest in.
Predictability
REITs are among the most predictable investments available. The underlying investment is in real estate, which has very predictable rates of rental growth and appreciation.
As such, when you invest in a REIT, you can often determine where your investment is likely to go. In recent years, REITs have typically outperformed the stock markets, making this a reliable choice.
Professional Management
Another crucial benefit of REITs is that they're managed by professionals. Managing your own real estate can be very challenging and time-consuming.
By opting for REITs, you can be confident that your investment is in the hands of skilled professionals who know what they're doing. This will help ensure a better chance of good returns.
Investing in Real Estate Investment Trusts
Real estate investment trusts offer a range of benefits. This makes them appealing to investors, and they're far more accessible than traditional real estate investments.
PMI Vegas Properties is a professional real estate asset management company serving Las Vegas and the surrounding communities. Under the PMI brand, we're a part of the fastest-growing property management company in the US. Take a look at some of the investment opportunities we have available today.
