Thursday, February 26, 2009

"American Conference" Talks About the History of REITs

Amercian Conference suggests understanding the releveance of the history of the REITs - Real Estate Investment Trust Market and its' significance.

Real Estate Investment Trusts (REITs) were created in the 60's so that all investors would have access to income-producing real estate through the purchase and sale of liquid securities. Before REITs were created access to investment returns of commercial real estate equity was only available to institutions and wealthy individuals.

For over half a century, REITs have become an important part of the United States economy and investment markets. United States REITs have grown from ninety billion dollars to over three hundred billion dollars in the past decade and they have gained popularity all over the world.

During their early years, mortgage Real Estate Investment Trust dominated the industry, providing debt financing for commercial or residential properties through investments in mortgages and mortgage-backed securities. Interest in equity REITs which own and manage commercial properties was limited because of the requirements that ownership and management of assets remain separate. This restriction was lifted with the passage of the Tax Reform Act of 1986 which allowed REITs to both own and manage properties. Now, more than 90% of publicly traded United States REITs are equity REITs that own and manage commercial real estate. Most of their income is derived from rents owned by companies across the nation.

There are certain guidelines and standards in place that must be followed in order for a company to qualify as a REIT in the US. The Internal Revenue Code requires at least seventy five percent of total assets be invested in real estate which realize at least seventyfive percent of its gross income from rents from real property or interest from mortgages. They must also distribute at least ninety percent of taxable income to shareholders annually in the form of dividends.

Wednesday, February 25, 2009

"American Conference" Suggests REITs

If you have been watching all the shifts in the investing markets, you may be a little worried about putting your money into any of them right now. Things have been falling and falling, how do you know where it will be safe to put your cash? American Conferencesuggests looking at REITs.

Perhaps it's time to look at some of the other investing options out there like real estate. I am not talking about running around and buying up any extra lots of property you happen to see around you. That comes with a lot of responsibilities and major outlay up front. Not only do you have to have the money to purchase the whole property, but you also have to be able to take care of it and maintain and manage it after the fact. This is a lot to ask for in an investment.

Instead, you may want to look into another type of real estate investing, real estate investment trusts. Real estate investment trusts or REITs are funds where you purchase shares of the investment and a real estate management group of real estate development group uses that money to purchase, build or maintain property ventures. You essentially fund a portion of a property acquisition and management group.

In return for your investment, you will be paid a portion of any profit that the company makes, much like a stock dividend.

While you may be wondering how wise it is to consider real estate in today's tough market, this is exactly why it may be a good time to look at a little more investing. Here's why. Sure, there has been a tough time for the markets. Lending has dropped, defaults on properties are on the rise. We're in tough credit times.

But now let's look at the positive side of things. Most think the slide has slowed and will soon be stopping. Add this to the fact that those capital markets that REITs use to get their funding for expansion and other purchases are low and that means the chances for REITs to get the capital they want to expand has dropped, for now. While you may think this is a bad sign, the truth is this is a time when the value of REITs is lower, meaning you can get in at a lower price. As things settle and go back to normal, your profits will go up and you will see an even greater return on your investment.

This is the time to log onto a website like and find out what REITs are out there, what they are selling for and get yourself in on this low tide so you can enjoy the ride when the financial wave picks up again.

With the other option being putting all of your money away and seeing no growth, what would you prefer?

Money Making Guru Robert G. Allen may have said it best saying, "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case."