Investing in Real Estate Securities for High Yield

If you do not want to deal with the management hassles, and do not have the time to spend for carious requirements of direct property ownership, investing in real estate securities can make an ideal choice for you. It is a kind of indirect real estate investment, but it has tremendous ability to produce high yields and potential capital appreciation for you. However, in order to get success in this indirect investment, you must have the proper knowledge regarding different types of securities. Only then can you decide how to make huge wealth by investing in which type of securities. Let me explore a few of the tremendous possibilities.

Real Estate Investment Trust (REIT):

Real estate investment trusts offer an excellent way to capture high yields and huge capital appreciations. Let me explain how it works. These companies are very organized and are regulated by law. That is the reason why they pay more than ninety percent of their total income as dividends to their shareholders. Thus, being a shareholder, you can also make hay while the sun shines. Moreover, you income is taxed only once. Professional management, high yields, long term capital appreciations, tax benefits and so on – what else do you need?

Mutual Funds:

Likewise, real estate mutual funds are also an equally effective way to capture high yields. These investment securities also offer almost al the features of real estate investment trusts, such as high yield, long-term capital appreciation, professional management and diversification etc. However, the only negative part is that since they are associated with real estate investment trusts, you need to pay double management fee and other expenses – first, to the trust management and second, to the mutual fund manager. However, keeping in view the high yield and other advantages it offers, this expense seems negligible.

Private Mortgage Notes:

Private mortgage note is also one of those investment securities that can provide high return to you. These securities are fully associated with income producing real estate, and you can use them for the acquisition, rehabilitation or equity cash out of residential and commercial properties. This way, in the first trust deed positions, you can obtain return, as much as 12% to 14%, and in second trust deed positions, the return can be even fifteen to eighteen percent. Moreover, you can enjoy various other advantages. For example, most loans can easily be closed in three weeks or less, which generally require ten weeks or more. Again, it is highly secure investment with no risk at all. Let me explain how. Since the lending judgment is always based on real property itself, you, as a private mortgage note holder can concentrate your due diligence efforts on the real estate securing the loan without worrying about the borrower’s credit issue.

Hence, here we see how investing in various real estate securities can help you capture high yields and long-term capital appreciation without dealing with any management hassle and with little or no risk at all.