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Investing In Real Estate Securities For High Yield

Aug 17, 2007
If you do not want to deal with the management hassles, and do not have the time to spend all the requirements of direct property ownership, investing in real estate securities can be an ideal choice. It is a kind of indirect real estate investment, but it has a tremendous ability to produce high yields and potential capital appreciation for you. In order to achieve success in this indirect investment, you must have the proper knowledge regarding different types of securities. Only then can you decide how to build wealth by investing in these types of securities. These are a few of the tremendous possibilities.

Real Estate Investment Trust (REIT)
Real estate investment trusts offer an excellent way to capture high yields and huge capital appreciations. These types of companies are very organized and are regulated by law. That is the reason why they pay more than ninety percent of their total income as dividends to their shareholders. Moreover, you income is taxed only once. Professional management, high yields, long term capital appreciations, and tax benefits are among the many reasons for investing in Real Estate Investment Trusts.

Mutual Funds
Real estate mutual funds are also an effective way to capture high yields. These investment securities offer almost all the features of real estate investment trusts, such as high yield, long-term capital appreciation, professional management and diversification. However, the only negative part is that since they are associated with real estate investment trusts, you need to pay a double management fee and other expenses, first, to the trust management and second, to the mutual fund manager. However, keeping in view the high yield and other advantages, these expenses seem negligible.

Private Mortgage Notes
Private mortgage notes are investment securities that can provide high return to you. These securities are fully associated with income producing real estate, and you can use them for the acquisition, rehabilitation or equity cash out of residential and commercial properties. This way, in the first trust deed positions, you can obtain returns as high as twelve to fourteen percent and in second trust deed positions, the return can be even fifteen to eighteen percent. Moreover, you can enjoy various other advantages. For example, most loans can be closed in three weeks or less, loans, which generally require ten weeks or more. Again, it is a highly secure investment with virtually no risk at all. Since the lending judgment is always based on real property itself, you, as a private mortgage note holder can concentrate your efforts on securing the real estate loan without worrying about the borrower's credit issue.

An Additional Though
This is how investing in various real estate securities can help you capture high yields and long-term capital appreciation without dealing with any management hassle and with little or no risk at all.
About the Author
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
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