For many people when they hear the word real estate the often think of some big project that Donald Trump may be working on or about purchasing a house then reselling it down the road for a significant profit. While both are using different strategies that involve real estate the fact of the matter is that there are many different ways that you can become involved in real estate. One such way is to invest in real estate investment trusts (REITS), this where you are purchasing the shares in those companies that will invest in the different types of real estate then they allow you to participate in the profits as well as income that they are making. To invest in REITS requires that you use time tested techniques which have worked for millions of investors over the years. Some of these techniques would include:
What is the history of the dividend payout: When you are investing in REITS the first thing that you want to look at is the dividend payout that has been received by shareholders over the last ten years. What you want to look for is those REITS which have a history of paying a consistent dividend and raising it during that time. This will help you to identify the strongest ones that have the most consistent dividends, helping you to invest in REITS more wisely.
What areas of real estate is the REIT investing in:
Another area that you want to pay particular attention to when investing in REITS is the areas of real estate that they are going to be investing in? What happens is there are wide variety of REITS which invest in many different areas of real estate such as commercial property, residential property and raw land just to name a few. By understanding what they are investing in will help you see how stable the REIT is in relation to its competitors, meaning that those which invest in one particular area are subject to larger amounts of volatility compared to those who invest in many different areas, allowing you to invest in those REITS that are as stable as possible.
Clearly there are many different factors that you must consider when investing in REITS. By using the above tips will help you be able to invest in REITS which are stable and are paying their shareholders consistent dividends, helping to invest in those REITS that offer the least amount of risk and greatest potential for growth as well as income.