Real Estate Investment Companies

Real estate investment companies acts as brokers and represents both buyers and sellers and create ideal opportunities for real estate investors. They represent clients in the sale, purchase, exchange and the finance of the real estate investment. Real estate investment companies are ideal for individual investors who want to take advantage of the real estate market but are unable to spend time on it. Most companies give personal attention and due importance to individual investors as they are their primary and most crucial segment of business.

The real estate investment companies deal with active brokers, a wide variety of investors, vendors, consultants and governmental agencies. Individuals can avoid many dangers associated with real estate investment by investing through companies as most companies employ personals that are trained to handle the pressure situations that often crop up in real estate investment. The investors who see the market clearly and make decisions based on the best evidence would get much profit from the real estate investment company. The investors can achieve the financial security and freedom which enables them to pursue other involvements.

Acquisitions, property management, due diligence, redevelopment, leasing, debt analysis and procurement, tax documentation, disposition analysis and detailed monthly reporting are some of the important services provided by real estate investment companies. Real estate investment companies are also referred as Real estate investment trust (REIT). Real estate investment companies have special federal tax treatment and must comply with certain tax requirements. There is a slight difference between Real estate investment companies and real estate investment trusts. For a company to become a real estate investment trust, it should share out 90 percent or more of its taxable income to its shareholders once in a year.

Before selecting a particular company, look whether they are registered under proper acts. Get as much information on a company from as many sources you can. [http://www.e-RealEstateInvestments.com]Real Estate Investments provides detailed information on Real Estate Investments, Real Estate Investment Trusts, Real Estate Investment Loans, Real Estate Investment Financing and more. Real Estate Investments is affiliated with [http://www.e-investmentproperties.com]Buying Investment Properties.

Real Estate Investment Trusts - Their Seven-Year Run on the Decline

Many books and articles have recommended new investors put their money into real estate. For investors just starting out, they probably do not have the backing or cash in the bank to purchase real estate on their own. The Real Estate Investment Trust (REIT) is a good way to invest in real estate with minimal funds.

REITs are mutual funds that own real property assets or mortgages, called debt-based securities. They allow even the smallest investor the opportunity to own a piece a real estate investment without going it alone.

Real Estate Investment Trusts came into their own during the housing bubble with attractive dividends, some of which paid 300 percent since the end of 1999. With the current real estate market, however, REITs are losing favor amongst investors.

According to a January 29th article in BusinessWeek, many Real Estate Investment Trusts are currently overpriced with dividend yields that are less than Treasury bills. In January, REITs were yielding only 3.6 percent. That is 1.3 percentage points lower than Treasury bills.

Current REIT investors can only hope that payouts will increase or the underlying property values rise. Real Estate Investment Trusts legally must pay out 90 percent of their taxable income in dividends; so, an increase in payouts is doubtful — cash flow does not grow fast enough to offer substantial increases within a short timeframe. Of course, the current real estate market means that property values are not steady. Where real estate values used to steadily rise year-after-year, positive value changes are no longer reliable. Many are still falling, especially in the office and apartment REIT investment arenas.

In 1997, Real Estate Investment Trusts were trading at 33 percent premium to their underlying property values, called the net asset values (NAVs). After the market bottomed in late 1999, they were discounted by 20 percent. In January, they were traded at a seven percent premium to NAV.

While market optimists believe REITs still have some running room, many investors believe the NAVs are now inflated. That means the REITs were taken out at a price significantly higher than their NAV estimates, inflating the property valuations. Some industry analysts justify the inflation, since REITs are in an asset class separate from bonds or stocks. They are considered to have matured as an asset class, making them an increasingly important part of many investment portfolios.

Though many investors and money managers are exiting out of Real Estate Investment Trusts, no one is recommending investors rid their portfolios entirely of REITs. Analysts only suggest you reconsider investing in new REITs and trim your current holdings.

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.

Real Estate REIT - Investing In Commercial Real Estate Is Easy With A Real Estate Investment Trust

REIT's are an easy way to invest in commercial real estate. But is easy a criteria that you should use when evaluating investments? Does ease of investing have any influence on how high your return will be in a real estate investment trust?

Ease of use has an impact on certain things. Software, for example, is measured on how easy it is to use. Ease of use has an impact on how many people will be successful in utilizing the purpose of the software. "Out of the box experience" is an ease of use event that people judge software and other items.

Ease of use does not have the same impact on real estate investments. However, ease of buying and selling do contribute to your investment liquidity. A publicly traded REIT will give you the ability to invest in commercial real estate without the illiquidity that traditionally has accompanied real estate investing.

Liquidity is a benefit when evaluating investments. You want to be able to get in and get out when you feel the need for either event. That is understandable. But liquidity does not necessarily have a positive impact on returns.

Just because you can get in and out of an investment easily does not guarantee that you will lock in a profit from that investment. So ease of use does not impact investment returns like it does software purchases.

Many people mix different criteria for evaluating things in their lives. They buy a minivan with two sliding doors that have remote controls because the vehicle is easy to use. They buy a computer because it is easy to set up and use immediately when they take it out of the box. People buy information like books and music on the internet because it is easy to purchase and they can use it immediately.

So ease of use improves people's lives in many ways. However, having an easy way to invest in commercial real estate should not be a criteria for judging the rate of return that you are likely to receive from an investment in a REIT.

Understanding Real Estate Investment Trusts

So you want to be a landlord without having the problem of repairing faulty roofs and lights? Maybe real estate investment trusts are for you. These structures are basically legal structures to allow investors to get access to the rental proceeds via dividends. These rental proceeds are net of property management fees and other legal fees pursuant to the transaction.

Developers use this instrument to offload properties in their stable into the real estate investment trusts so as to generate cash to purchase other commercial buildings while retaining a sizeable stake in the REIT. Each year or half yearly depending on the REIT, they distribute rental income in the form of dividends to investors. Things to take note off include what the properties in the REIT are. Sometimes developers try to move their non-performing assets into the REIT so that their listed companies can report better illusory earnings and you should take note of this.

Now that we have explained what a REIT is, the rest of the article will highlight three reasons why you might want to invest in a REIT.

Firstly, owning units in a REIT allows us to gain rental exposure to large commercial buildings. Let’s face it most of us real estate investors do no have the financial ability to own large commercial buildings so sometimes it will be good to purchase units of a real estate investment trust so that we can participate in the upswing in office rental of a commercial building.

Secondly, owning units in a REIT because of its trust like structure allows for a tax flow through of the profits (this means no tax on profits from the REIT). If in doubt, spend some time consulting your tax attorney for advice on this. Another way to get some tax knowledge is to ask for a copy of the prospectus of the REIT and read the section on tax advice.

Thirdly, listed REITs are tradable like shares so you can do the normal things that you would do with shares. The advantage of this is that you can examine the usual commercial rental data to determine whether rentals are going up or not and when you should purchase the units in the REIT. Always remember the importance of value investing especially so in an investment involving real estate. Spend time researching on the REIT that you are interested and figure out the value that you think it is worth and wait for the unit price to drop and swop in to make your purchase.

In conclusion, we have gone through the basic concepts of how real estate investment trusts work and highlighted three reasons why you might want to invest in a real estate investment trust (REIT). Remember that like with all investments, do your due diligence, time your entry and exit properly and you can make money both from the equity value and the rental yield of the underlying properties.

What is a Real Estate Investment Trust

“Well, real estate is always good, as far as I'm concerned.” -Donald Trump

A real estate investment trust, or REIT, is a company that sells real estate but allows the public and individual investors to buy shares. REITs are just like any other stock option which represents a company. However, there are two defining features of real estate investment trusts which make it a great investment opportunity. The first feature is that it's only business is coordinating and monitoring property investments. The second feature is that it has to hand out its profits in the form of dividends.

The reason why real estate investment trusts are so popular is that having the REIT status means that corporate tax is not applied to the business. When non REIT companies make a profit they must pay taxes first and then disturb what is left. However, real estate investment trusts do not get taxed and therefore can distribute all the profits made in the form of dividends to their investors. If you have a large principle which you can invest, real estate investment trusts may be a great option for you. If you are interested in REITs contact a financial advisor who can point you in the right direction and offer advice on how to pick the perfect REIT for you.

REITs are great if you are interested in making an income and living off your investments. REITs have a similar status of high yield bonds in profit producing power and rate of return. Remember, both REITs and high yield investments are high risk which is why they can be, if all goes well, extremely profitable. Real estate investment trusts can be affects by th same factors which influence the stock market and the economy. These may include supply and demand, interest rates, inflation, and deflation. A rise in interest rates is a good indicator of a slowly growing economy. This is great for people invested in REITs because it means that businesses are growing and looking to rent or buy more space. The same is true with residential housing. When the economy is doing well people want to buy homes, apartments, and condos.

REITs are companies that reap the benefits of no corporate tax by managing real estate properties and paying out the majority of their profits in dividends. Dividends can offer an extremely large and stable income which can be much more then the returns from Treasury options or even small cap stocks.