When Is It the Right Time to REIT?

Real estate investing is one way to accelerate your journey to financial freedom. Often times, people associate real estate investing with flipping houses or owning rental properties. If this type of investing isn’t for you, don’t dismiss real estate entirely. Instead, real estate investment trusts (REITs) might be the solution to your investment portfolio needs.

What is a Real Estate Investment Trust?

Think of a REIT like a mutual fund of sorts. Whereas mutual funds use pooled money from investors to buy stocks, bonds, or short-term debt, a REIT allows individual investors to own a slice of income-producing real estate.

These real estate portfolios may be made up of a mix of property types depending on the REIT an investor selects. The REIT buys the properties and then leases the real estate space to other companies or individuals. The income stream generated from the rent is then distributed as dividends to shareholders.

The REIT you invest in is usually specific to one particular area of the real estate market.

For instance, a healthcare REIT might own skilled nursing facilities, senior living centers, medical offices, and hospitals whereas an office REIT might own office parks, properties in business districts, or even skyscrapers. Other types of REITs…