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Investing In Various Types of Real Estate Securities

Oct 19, 2007
It can always be a wise decision, investing in various types of real estate securities . We can say this because one doesnt need to deal with management hassles, and neither is there any need to waste time on the various formalities involved in a direct ownership of property. This type of investment is an indirect realty investment that has the potential of producing high yields and considerable appreciation of capital for you. If you want to invest in real estate securities, it is very important to have appropriate knowledge regarding various types of realty securities and their potentiality for profit.

Real Estate Investment Trusts

Commonly known as REITs, real estate investment trusts prove to be the best choice in order to gain huge profits and huge capital appreciations by investing in realty securities. These trusts are organized companies that are regulated by law. The most beneficial aspect of investing in these types of securities is that they pay more than 90% of their total income as dividends to their shareholders. Besides, by being a shareholder, you need to pay tax only once. Thus, REITs provide you a range of advantages like professional management, long term capital appreciations, tax benefits, high yields, etc. The dividend yields that can be expected lie in the range of 5-8%.

Real Estate Mutual Funds

Among the various types of securities, mutual funds prove to be one of the better options. The important aspects of these types of securities include professional management, high yield, long-term capital appreciation and diversification etc. But on the other hand, its negative aspect is that you need to pay double management fee and other operating costs, first, to the trust management, and second, to the mutual fund manger. This is because they are associated with realty investment trusts. Yet, compared the high yields and other advantages that they have, the expenses involved are minimal.

Private Mortgage Loans

Private mortgages are considered to be another high yield security. Since they are affiliated with income producing realty, they can be useful for the acquisition, rehabilitation or equity cash out of residential and commercial real estate investing properties. Thus, you can gain returns, of up to twelve to fourteen percent in the first trust action, and the returns can go up to fifteen to eighteen percent in the second positions of the trust. There is a wide range of other advantages also. For instance, where normally you would require 10 weeks or more for loan closings, it takes not more than 3 weeks. You can gain much higher yields with no increased risk once you invest in private mortgage notes. The duration of these loans usually last for a year, and provide a monthly income with interest only payments.

Overall, if you have a full time job or business, or if you are just retired looking for greater income than bank CDs and greater security than a volatile stock market, or if after having owned income-producing property for many years, if you are tired of dealing with tenants, realty investing in securities is a great alternative for you.

Hence, if you are doing a full time job or business, or if you are just retired and want to invest, then investing in such securities can always result in more profits compared to bank CDs, while also gaining greater security than a volatile stock market. Even those who own the income-producing property, and are tired of handling their tenants, may opt to invest in realty securities.
About the Author
Real Estate Investments are available now in this 2007 red hot Real Estate Market. Real Estate Investing is easy with RealNet USA. Check out our inventory at http:www.realnetusa.com
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