A Beginner’s Guide to REITs
The world of real estate investments can be complex, as there are so many different small details to learn about and be aware of. One popular form of real estate investment is a REIT, a real estate investment trust.
Here is a beginner’s guide to REITs.
What is a REIT?
Simply put, they are companies that own, operate, and finance real estate that is income producing.
Why should I own a REIT?
These types of investments are great in that they give the investor the special ability to gain access to dividend-based income and total returns while possessing valuable real estate property that benefits the community as a whole.
How does REIT investing work?
REITs investment is straightforward, the investor is able to choose a portfolio, purchase their portion via a mutual fund or an exchange traded fund, thus making them eligible to earn their share of the income. All of this is done remotely, so the investor doesn’t necessarily have to go out to buy and spend time managing the property. Instead, by leasing space and collecting rent on the property, that income will go right back to you and the other shareholders.
What types of property are REITs good for?
REITs work well in traditional commercial real estate, however, camping as a vocational activity is on the rise and brings out a whole new interesting opportunity for investors. Campsite franchises are becoming increasingly more popular because not only do they allow for a fast ROI, camping itself it changing. Campers are staying close to home, with about 50% traveling less than 100 miles away from their home while camping. They also expect more amenities and luxuries, such as wifi and plumbing, to complete their home away from home. So, simply put, camping isn’t going anywhere!
What are the qualifications for REITs?
According to REIT.com, to qualify for these types of investments a company must:
- Invest 75% of their assets into real estate
- Pay at least 90% of taxable income to the shareholders
- Have a minimum of 100 shareholders
- Be an entity that is taxable as a corporation.
Interested in learning more about investing in a campsite franchise? We will walk you through the entire process, so please contact one of our professionals today to discuss about investing.