A NewsNation article reported that, according to the latest Gallup survey, 36% of surveyed Americans regard real estate as the best long-term investment. Indeed, real estate has been the top choice for many U.S. investors for the past 12 years.
So, if you plan to build an investment portfolio soon, consider starting with real estate.
If you worry about not having an adequate budget, don't. You can become an investor without buying a property, thanks to real estate investment trusts (REITs).
Join our team here at PMI Columbus as we discuss REITs and share residential and commercial property investment strategies to help you get started.
A 101 on Real Estate Investment Trusts (REITs)
Real estate investment trust companies own, operate, manage, and finance income-generating real estate properties. According to Nareit, they own over $4.0 trillion of the country's gross real estate. In 2023 alone, they paid shareholders an estimated $110.8 billion in dividends.
REITs allow you to invest in their income-generating real estate properties, such as:
- Apartment complexes
- Hotels
- Office buildings
- Data centers
- Healthcare facilities
- Infrastructures like cell towers and fiber cables
- Self-storage units
- Retail centers
- Warehouses
So, by purchasing REITs, you have more real estate income opportunities that won't require you to buy, manage, rent, or sell properties. Instead, you'll earn income through the dividends paid by the REIT or an increase in the value of your REIT's shares.
What Types of REITs Can You Invest In?
There are several, but equity REITs are among the most popular. They primarily generate revenues by renting out residential and commercial investment properties.
You can also invest in mortgage REITs. They directly and indirectly lend money to real estate owners and operators. They generate income through the interest fees they charge for mortgage loans.
How to Start Investing in REITs
First, you need a brokerage account with a reputable brokerage firm. You'll use your account to purchase shares from:
- Publicly traded REITs listed on major stock exchanges
- Real estate trust funds, mutual funds, or exchange-traded funds (ETFs)
- Non-traded or private REITs
As a newcomer, you'll likely want to start with publicly traded REITs because they have the most affordable share prices and are the simplest to purchase through a broker. You should also start small and take time to familiarize yourself with the REIT landscape. Once you've gained enough exposure, you can allocate more funds to other REITs and investment tools (e.g., bonds, stock, real estate properties) to create a more diversified real estate portfolio.
Start Building Wealth With REITs
Real estate investment trusts (REITs) are an excellent way to start investing in real estate, especially if you're not ready to own, manage, rent, or sell a physical property. They're an affordable starting point, so if you're looking for long-term investments that are easy on your budget, consider REITs.
PMI Columbus, our full-service property management company providing brokerage services, can help you start your real estate investing journey. Our team comprises experts with many years of experience in real estate and property management. Rest assured, we'll use our expertise and knowledge to help you choose the right income-generating investments.
Speak with us today for a free consultation to learn how we can help you become a savvy investor!
