Sunday, March 22, 2009

REITS for the Liquidity of Real Estate Investments

When you think about real estate and investing in it, you probably think that means money that you will be out of for a long, long time. This only makes sense. Most people think of real estate investing as purchasing a home or pieces of land. The loans for these purchases often last quite some time.

But this does not have to be the case. If you know what you are doing and are doing real estate investing instead of real estate purchasing, you can have full liquidity of your money, just in case you need it.

Here's a look at the difference. In real estate purchasing, you are buying properties and then responsible for them. If they are homes or businesses, you have to maintain them and keep them in good working order.

On the other hand REITs are investments. They are purchased in shares, just like you would with the stock market. If you need some liquid cash or just no longer want to be a part of a REIT, you just sell your shares as you would with any other stock or mutual fund investment.

In many respects, REITs offer the same flexibility as any of the other markets, while at the same time offering you the chance for a longer-term secured investment.

What I mean by secured investment is that for the most part real estate always has some value. While the value may fluctuate, it is a physical asset that will retain some value over the long term. In other stocks and mutual funds, if the company that you are purchasing shares in goes out of business, you can lose everything. In the case of real estate investing, there is always an asset with worth involved.

Many people steer away from REITs because they are not a 'make money fast' source of investment income. In most cases, that is true. Most REITs will see pretty constant regular returns in dividends, but not necessarily big spikes where you can grab a big profit. With that said, think about what else is in your portfolio. If you have other stocks and mutual funds in your portfolio adding real estate investments will give you a more stable backbone to base your investment profile off of.

There is also another way to add diversity to our real estate investment trusts. Why not diversify the trusts you own. Instead of just owning commercial, residential or US based ones, you can purchase shares in a number of different investment trusts across the world and across all markets.

When you're ready to jump onboard and diversify your portfolio with the addition of a few REITs, it's time to do a little research and understand what you want and how to get it. Instead of trying to sort all of this out from a number of different sources, why not do it the easy way and get everything you need in one place. has all the aspects you need to get going with REITs. From research and analysis of the REITs out there to the tools to follow them and even make a purchase, as they are a complete investment real estate broker site.

"PLC Holdings" - Use REITs to Hedge the Stock Market

Have you taken a look at your investment portfolio lately? If you have, and it's filled with the normal stock and bond investments, you may have noticed that there has been a lot of damage to those investments in the past year or so. With the credit crunch and the market crash, most investments are half, or less, of what they should be.

This is when you should consider what you should be doing to hedge those other investments. This is where REITs come in.

REITs are Real Estate Investment Trusts. These are funds where you fund a real estate management company. There are a variety of REITs out there. Some offer a way to back real estate developers who are taking on new ventures in construction. Others are meant to fund management of residential real estate such as apartment complexes, condominiums or even neighborhoods. Still others use the funds put into the REIT to operate commercial real estate interests.

I think Louis J. Glickman said it best when he said, "The best investment on earth is earth.” Real estate is always a wise investment. No matter what happens the land will always be there. Sure it may waiver in value from time to time, but in the long run, it will always be around, unlike businesses that can close their doors and take your investments down with them.

With this said, adding a REIT or two to your portfolio it would offer you a little more diversity and security in your investments.

You never know what the stock market will do. Just in the past few decades we have seen a number of sweeping changes in the market that completely broke some investors. Think of how many people you know who went bust during the era.

Often the problem for them was they were too focused on the flavor of the month. They were putting everything they had into the new Dot.coms hoping to continue to ride the boom and make great profits. While they did see some great profits, those did not last forever. For those who kept putting everything they had into the market, they felt the agony of defeat in a major way when the market fell, many losing everything they had.

While there is nothing wrong with trying to jump in on an up and coming thing and make a great profit, it comes down to the old 'all your eggs in one basket' cliché. You don't want to have everything hedging on one investment. Instead have a diverse portfolio so if there is a drop in one area, you have other investments hedged against it.

In this case, even when there is a drop in the stock market and mutual funds, real estate usually will hold pretty strong through the down times, keeping you from feeling that all of your investments have been swept away.

When you're ready to take a step towards diversity, make sure to do it right. Going to a website like will help you do just that. They will not only give you the research and information you need to buy wisely, but they are also real estate brokers for these investments and can help you seal the deal.