Real estate investment trusts (REITs) can help you attain more financial security. They allow you to diversify your investment portfolio without risking the equity that you build. This ability generates favourable returns from various sources makes them as ideal as having cash reserves, bonds or stocks. Such trusts manage or own income-generating properties. They can acquire such properties through purchases or mortgages. Here are the main types of REITs:
The healthcare industry has many sub-sectors that are prime for investment. Real estate investments can be in hospitals, nursing homes, and other types of medical facilities. These investment rely on occupancy fees, reimbursements from insurers and funding from the government and other partners.
These are real estate investments in office parks and buildings. Investors receive dividends from rents and various types of leases. Try to look into a high net worth location or an economic stronghold when investing is such REITs. It’s better to own a few average office buildings in Toronto that one prime building in Whitehorse.
Mortgage REITs are investments into mortgages as opposed to holding equity. They generate income through debt offerings. In a stable market, they provide considerable returns. However, they come with a little risk when interest rates rise.
Such REITs own or maintain apartment complexes or other multi-family housing schemes. The best residential investment REITs are in urban areas. Such areas have large populations and employment opportunities. Therefore, there is a lower vacancy rate, which means a higher rate of returns.
These REITs have holdings in retail properties like malls and freestanding shops. They generate income from the proceeds that came from renting out shopping space. Most investors also prefer such REITs as an investment option because they offer high returns. However, it’s wise to look at a potential retail industry before making a real estate retail investment.