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Financial Advisors Gaithersburg MD: What is a REIT?

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Gaithersburg, (301) 812-4608
Owings Mills, MD, (410) 363-4683
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What is a REIT?

A REIT is a security invested in real estate through properties or mortgages. With REITs, investors can invest in the real estate market without being held down to certain properties.

REITs are very popular because they produce high yields due to money from rental properties or mortgage interest payments.

REITs are great for income driven investors because REITs have to pay 90% of their income to shareholders in the form of dividends.

REITs have a preferred capital structure because they have access to corporate level debt and equity that the average real estate owner does not have access to. They can then use the capital to finance tenant improvement costs and leasing commissions that other real estate owners cannot afford.

Real estate investments are subject to a high degree of risk because of general economic or local market conditions; changes in supply or demand; competing properties in an area; changes in interest rates; and changes in tax, real estate, environmental, or zoning laws and regulations. REIT units/shares fluctuate in value and may be redeemed for more or less than the original amount invested. There is no assurance that the investment objective will be attained.