New Ways to Invest in Real Estate

People today want to invest in real estate and it is much easier than when you are not a landlord. Being a landlord can be very difficult, especially when you have to deal with pesky tenants and the problems they can bring. However, there are ways to invest in real estate that do not require you to become a landlord and that can bring a hefty profit.

A great way to invest in real estate is to buy shares from something called an REIT – real estate investment trust. They are sold like stocks in the stock market and are usually owned by individuals or institutional investors.

There are many great things about an REIT or a real estate investment trust. They are a great addition to a retirement fund because people usually need to diversify their accounts. It’s nice to have investments in a variety of things and not to keep it uniform. These trusts develop properties and accrue rental income over time.

The income gained from renters usually goes to the investors, meaning you. Another great thing about them is that it is less complicated to invest in an REIT than it is to flip a house or crowdsourcing.

REITs came about as great sources of profit for investors after a law was passed in 1960 that aimed to better regulate them. The REITs had to meet a certain amount of tests before they could qualify as actual real estate investment funds.

If they did, 90% of their taxable income had to be doled out to investors in the form of dividends. The Internal Revenue Service also must determine whether or not the companies that make up an REIT are certified real estate firms.

Today is a great time to invest in these kinds of funds. After the real estate market crashed, housing prices plummeted but have recently started to rise again.

It is beginning to show signs of promise. Interest rates have also greatly decreased, which allows for the entrance of big funds into the real estate market.