Whatever your level of expertise in the world of investment, if you haven’t considered your property investment options yet, it is about time that you did. It is a promising venture that offers much in the ways of secured assets and long-term growth. There are definitely risks involved and you must consider these before you decide that a REIT is the type of investment alternative for you. Nonetheless, there are a few key benefits that are worth looking into first. Here are some of them to give you an idea of what you can stand to gain.
It Will Diversify Your Portfolio
As mentioned, you have probably already been an investor for some time, so you may know your way around diversifying your portfolio. If you’re still a little green, however, all it comes down to is securing your investments by not putting them all in one market or industry. Ideally, the most diverse portfolios ensure that you will never suffer any truly crippling losses. So in the case of REIT alternative investments, you are fortifying your portfolio as property is typically inversely tied to many of the other asset classes. This will afford you some protection from risk.
It Allows Transparency for Identifying Assets
The trusts are duty-bound to be transparent with financial information and must report on all risk and business developments. In effect, this gives you much more control over your assets and much more comprehensive information on which to base your investment decisions. The professional management offered by the trusts and this level of real-time market analysis, lets you secure your investment regardless of your skills or experience levels.
You’ll Have High Dividends and Long-Term Secured Income
One of the reasons that REITs are so popular is because of the 90% or so requirement for income dividend that you can receive. Add to that the benefits of tenants with long-term lease contracts, such as with equity residential trusts, you have a gold mine for an investment. Furthermore, you could find a list of data center REITs that highlight investments with attractive dividend yields, such as Digital Realty, Equinix, and Iron Mountain. These are often insightful in helping you make the most of individual dividend stability and growth potential, making it likely to keep you running well into your retirement. Over time, this comes to be a highly stable and secure income.
It is a Highly Liquid Investment Opportunity
Buying and selling in this way is much easier than it would be to buy and sell a property yourself. This is largely because the way REIT shares are traded is through major stock exchange platforms. Essentially, you will not need to personally own a property in order to invest in actual income-generating real estate. The major difference between Real Estate Crowdfunding vs REITs is that the former gathers investment capital from online investors to join together to purchase a specific property, while the latter is considered like an exchange-traded fund or stock. By the beginning of 2016, these type of trusts had a market capitalization of nearly $1 trillion within the US alone.
It Guarantees Long-Term Share Price Appreciation
Over the past several decades, these publicly traded REIT companies have proved themselves reliable in providing growing dividends and high incomes over time. Compared to bonds, the broader stock market, and other assets, these trusts performances are unparalleled in total return over the long run. You stand to benefit from this incredibly strong potential capital appreciation.
These are just five reasons why you should seriously consider diversifying into REITs. If this is something you are interested in, make sure that you explore all your options, risks, and benefits thoroughly.