Understanding REITs

What is a REIT?

In its simplest definition, A Real Estate Investment Trust, also known as a REIT, is a company that owns and operates income-generating real estate assets. Individuals invest in the REIT and the REIT will use that capital for the purchase of properties.

The Basics

  • A REIT investment is an investment into a portfolio of multiple real estate assets.
  • Different types of REITs can include publicly traded REITs, public non-traded REITs, and private REITs.
  • REITs typically focus on one real estate sector. Example sectors include apartment buildings, health care facilities, hotels, retail centers, self storages, and more.
  • REITs can generate income in different ways such as rents collected, interest payments, or the appreciation and sale of a property.

Benefits of Investing in a REIT

There are many upsides to investing in a REIT. Individual investors looking to diversify their portfolios benefit from adding another asset class-real estate-to their portfolio mix. Another reason many people choose to invest in REITs is because of the high historical returns, especially when compared to the stock market. The S&P 500’s 20-year average return is about 8.6% while the 20-year average annual returns for REITs are at 11.8%. Additional REIT benefits include being a hedge against inflation, a passive investment where the investor doesn’t need real estate expertise, and the fact that they are a great long-term wealth generator.

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How you can invest in a REIT

REIT investing is the perfect way to grow long-term wealth and add to your retirement saving strategy to diversify your portfolio. With today’s tech and the rise of advanced investment platforms, investments can be made 100% online. Individuals can invest cash or even self-directed IRA funds into a portfolio of diversified real estate assets. If you have a traditional IRA or an old employer-sponsored 401(k), you can roll it over into a self-directed IRA and start investing on your own terms.

About DiversyFund’s Growth REIT

The DiversyFund Growth REIT was built for the everyday investor. With a low $500 minimum, investors are instantly co-owners in a diversified portfolio of real estate assets. The DiversyFund Growth REIT is a public non-traded REIT that owns and manages all of their own real estate assets. This means more transparency, control, and overall insight on all properties.

Key Features

  • Focused on multifamily properties because of the rising demand
  • Focused on long-term growth from repositioning and selling existing properties
  • 100% passive investment option-no real estate experience required
  • Open to all investors-accredited or not

Originally published at https://diversyfund.com.