Are you interested in being a real estate investor without having to deal with the hassles of upkeep of your investment property? There are undoubtedly several ways you can invest in real estate without being a landlord. Craig Cecilio, the founder of DiversyFund, shares how they are changing the way people invest in real estate.
One advantageous form of real estate investing is a real estate investment trust (REIT). REITs allow investors to diversify their portfolio without the hassles of directly acquiring property. REITs are Real Estate Investment Trusts, and they are companies that invest large amounts of money into residential multifamily homes, commercial buildings, healthcare facilities, and large-scale industrial buildings as well.
Unlike common stocks, an essential leveraging aspect of REITs is that they do not pay federal income tax. This means that they are required by law to pay out 90% of their profits as dividends to investors. There are many REITs out in the market now, and you can choose which real estate industry you’d like to invest in.
There are two types of REITs, public and private.
Like all shares traded publicly, investments in public REITs are liquid, and the owner can evaluate the performance of the shares they own daily. As a result, public REITs tend to focus on short term performance
Private REITs are not traded in the stock exchange. These vehicles are not susceptible to exchange-traded supply and demand-driven price volatility. Unlike Public REITs, Private REITs are not as liquid, meaning investors do not have the option to sell or redeem their shares at will. The positive side of this is it allows for more stability and allows the REIT to focus on real growth for the investor.
If you are looking for a passive strategy to invest in real estate, DiversyFund can help you invest in private REITs that generally offer higher dividends than public real estate investment trusts.
DiversyFund was founded to help everyday investors build wealth like the 1%. The company opens up real estate investing to the average person by breaking down traditional barriers to entry such as high minimum investments and unnecessary broker fees. Through DiversyFund’s online platform, they are helping investors diversify their asset portfolio beyond stocks and bonds.
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