Skip to main content

Property Management Blog

What Is a Real Estate Investment Trust?

What Is a Real Estate Investment Trust?

Did you know that the price of homes in Orlando, Florida, is at an all-time high?

This may make the prospect of real estate investing feel daunting, but you shouldn't worry. There are more options for real estate investment than the traditional method. More and more people are realizing that real estate investment trusts are a viable option.

Have you ever asked yourself, "What is a real estate investment trust?" Keep reading to learn all about it and why it's worth your consideration.

What Is REIT Investing?

Put in the simplest terms possible, real estate investment trusts are a way for people to gain access to income-producing real estate. Without a REIT, it can be extremely difficult to jump over the hurdle of initial expenses.

REIT companies often own a wide variety of properties, including apartments, homes, offices, hotels, resorts, storage facilities, and more. No matter what kind of real estate portfolio you want to build, you'll be glad to know that you have a wide range of options.

The returns on investment can come from individuals who are renting a living space, professionals who are renting a retail space, or even organizations that need office space.

You may be surprised to learn that REITs date back to the Eisenhower administration and were introduced as part of the Cigar Excise Tax Extension of 1960. The concept of pooling funds makes it easy for many more people to diversify their portfolios by adding real estate to their lists.

How Do REIT Stocks Work?

By investing in one or more REIT stocks, you can get regular payouts from a percentage of the total income earned. There are, of course, various rules and regulations you should be mindful of.

For example, 75% of income or more should stem from properties rather than investments from other parties. Plus, at least 75% of their total assets should be invested in real estate properties.

Are you wondering what other regulations all REIT companies must follow? 90% of the income that those properties earn should go into the pockets of the investors. This ensures that investors aren't getting taken advantage of.

When it comes to REIT companies, managing all of your properties can quickly become overwhelming if not impossible. The best solution to property management involves hiring a team of experienced and resourceful professionals.

What Is a Real Estate Investment Trust?

Has a friend or family member ever asked you, "What is a real estate investment trust?" Now that you've learned about it, you can explain it to them in detail. Be sure to decide whether this type of investment is right for you or not.

Whether you own property traditionally or through top REITs in Orlando, we can help you manage every aspect. Our services include advertising, property maintenance, tenant screening, rent collection, and much more.

We value fairness and transparency, so feel free to take a look at our prices and reach out with any questions you might have.