Property Investment Funds
There are many people that are interested in earning higher rates of return than savings and money market accounts, CD’s, and treasury bonds offer. The returns that they are looking for are contained within the stock market. However, their tolerance for risk is very low. The basic idea behind IT’s is pretty easy to understand. A Real Estate Investment Trust is somewhat like a mutual fund in that they have a portfolio in which they invest their money. But instead of having a portfolio of stocks and bonds, IT’s have portfolios of land, office buildings, residential housing, and many more forms of real estate. Real Estate Investment Trusts hope to earn their profit by investing in these forms of real estate and then earn revenue through the appreciation of the underlying value and through monthly rent and leases.
Real Estate Investment Trusts are still traded on stock exchanges in the form of stocks, even though they are special kinds of investments. Like stocks, they report their earnings, dividends, and other news.IT’s have a few nice advantages to them. Unlike the average stock, IT’s pay very high dividends. In fact, the average IT has a dividend yield of . This high dividend yield offers many investors an excellent source of income. The dividends are also seen as safe because most IT’s have an excellent track record of paying a dividend every single quarter. They are also seen as fairly safe investments. Real estate investing has been around for centuries and the value of real estate has appreciated steadily over the years. Also, the dividends that a REIT pays reflects its growth because the dividends generally increase steadily each year.