Ryan
Jun 23rd, 2009

Working Backwards: What’s a Real Estate Investment Trust?

A real estate investment trust (REIT) is a tax designation for a corporation investing in real estate that reduces or eliminates taxes with a catch–REITs must distribute almost all of their income to their investors. These REITs often issue stocks, so it’s possible to buy into REITs–including indices of REITs–as an individual investor.

A few years ago, when real estate was red hot, so were were REITs. These days, like real estate, REITs are taking a beating; for instance, the Vanguard REIT Index (VGSIX) is down 8.72% year to date, trailing the essentially flat for the year S&P 500 index; however, it also pays a yield of 8.98%, which is considerable, meaning that there is still some nice benefit to owning a REIT–income.

While it hasn’t performed great as of late, real estate is an area worth diversifying in; instead of buying actual real estate, a REIT or REIT fund (or ETF) may offer the benefits of buying real estate at a lower initial cost and without the headaches of being a landlord. Consider a REIT for diversifying your investments if you would like some exposure to real estate.

Tags: , ,

8 Responses to “Working Backwards: What’s a Real Estate Investment Trust?”

  1. # Working Backwards: What’s a Real Estate Investment Trust?on 23 Jun 2009 at 3:12 pm

    [...] Original post by Uncommon Cents [...]

  2. # Working Backwards: What’s a Real Estate Investment Trust? | BuyWithoutYourBank.comon 23 Jun 2009 at 3:38 pm

    [...] the original post:  Working Backwards: What’s a Real Estate Investment Trust? Share with [...]

  3. # » Working Backwards: What's a Real Estate Investment Trust … | Real Estate Investments Researchon 23 Jun 2009 at 3:48 pm

    [...] story here admin Reschke planning another LaSalle St. hotel – Chicago Real Estate [...]

  4. # What's in my Portfolio: Vanguard REIT Index ETF | Uncommon Centson 27 Jun 2009 at 2:19 pm

    [...] We talked about Real Estate Investment Trusts not long ago, and we talked about Exchange Traded Funds awhile back. Now combine the two and we get one of my very small holdings, the Vanguard REIT Index ETF (VNQ). [...]

  5. # Office Space On Rent In Noidaon 07 Jul 2009 at 2:30 am

    Thanks for the post. What do you all think of the future of blogging? I have been reading a lot about google’s attempt to gain preferential treatment for its site from internet providers. This will result in their sites being faster than sites owned by individuals and/or smaller comapnies. It’s my beleif that if google is able to succeed there will be far less websites out there and therefore far less blogging.

  6. # Music Videoson 20 Jul 2009 at 2:27 am

    Thanks for sharing this. This is great.

  7. # Blackjack Basic Strategyon 18 Aug 2009 at 4:33 am

    Really a nice post. Thanks for sharing this.

  8. # Blackjack Cards Countingon 18 Aug 2009 at 4:38 am

    Awesome post I really like it. This is very informative post. thanks.

Trackback URI | Comments RSS

Leave a Reply