Real Estate Stocks: What They Are And How To Invest In Them

What Are Real Estate Stocks? Real estate stocks can involve any publicly traded stock for a business that touches the real estate market in some shape, form, or fashion. These can range anywhere from: – real estate brokers – technology companies – manufacturers – retailers – developers – financiers

A major advantage of investing in real estate stocks is that you don’t have to have as much money to get started as you would directly buying the physical property.

What About REITS? A REIT, or real estate investment trust, is a company that owns, operates, or finances income-producing real estate. They can either be private or public, with the publicly traded REIT being the more popular of the two.

Advantages of Buying Stock in a REIT

– As previously mentioned, REITs must payout at least 90% of their income as dividends. As you can imagine, this is the main reason why investors put their money in them.

– These large payouts will result in above-average yields, which is great for the dividend investor.

– As opposed to owning physical property, REITs are more liquid as you only need to sell your shares to cash out.

Investing in REITs helps to diversify your portfolio. Several years ago, our investment portfolio was 98% in the stock market.

Lower cash flow risk: REITs offer attractive risk-adjusted returns and stable cash flow as they are highly diversified with 1000’s of properties to choose from.

One of the best ways to hedge against these negative situations is having diversity in your portfolio. For many other high-income earners and us, real estate helps add to our portfolio’s diversification. Investing in real estate stocks allows busy professionals to reap the benefits of owning property without the hassles of being a landlord.

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