Interested in becoming a real estate investor? Investing in REITs can be a great way to start

By
Services for Real Estate Pros with Representative

Real estate investing is becoming ever more popular and this trend is likely to continue in the future because individuals are centered on improving their lives, which can be accomplished through money-making. The profit can vary greatly, based on the type of investing and the time devoted to it. Any person can slowly but steadily build wealth if they take the right advice and have enough determination. If you’re willing to educate yourself about the process and the best ways to get returns, you too can make money in real estate. Perhaps you won’t become a millionaire, but you’ll make enough money to live off the interest. If you don’t know how to get started, we’d suggest investing in REITs.

So, what is a REIT, anyway?

REIT is an acronym and it stands for Real Estate Investment Fund. It’s basically a company that owns or finances revenue-generating real estate across various property sectors. Casinos constitute a non-negligible source of revenue for publicly-traded REITs, just so you know. Having a strong financial condition, a REIT can manage just about any challenge, even if a visible crisis is looming. Broadly speaking, if you select the right one to invest in, you can enjoy a steady stream of payouts every month or at the end of every quarter. Some benefits of REIT investing include the lack of corporate tax, high dividend yields, and total return potential.

Under the spotlight: Types of REITs you may want to invest in

If you have no intention of becoming involved in property ownership as a landlord, then REITs can be a great option for you. By putting your money into a REIT, you can help the community grow and thrive. Knowing about the different types of REITs to invest in will help you decide what to do next.

Retail REITs

A significant percentage of investments are made in shopping malls and freestanding retail in upmarket areas. The REIT makes money by leasing space to people looking forward to setting up shopping malls, grocery stores, boutiques, and so on. Regardless of what shopping center you visit, it’s most likely owned by a REIT. Prior to making an investment, analyze the retail industry and establish if it’s financially healthy. Take into account mall REITs, which specialize in indoor or outdoor shopping malls, or a combination of both. Some areas might be hurting, but not all types of retail are in the same boat.

Recently, mini-casinos have been added to shopping malls to support local jobs and revitalize the economy. Online casinos like Boom Casino are easier to register; if you want to get a feel of the overall experience read Boom Casino and slot reviews. However, many yearn for the noisy days filled with lots of activities and are tempted by the idea of visiting a traditional casino. The point is that mixing uses can revitalize underperforming malls. Make sure to invest in REITs with strong anchor tenants. And keep in mind that not everything is particularly vulnerable to Internet disruption. Everything is being placed on the web these days, but not everyone goes online for entertainment such as casino games.

Residential REITs

These are the REITs that own and operate multi-family rental apartment buildings, not to mention manufactured housing. While some own apartment buildings, others specialize in high-rise apartment buildings. Let’s not forget about the REITs that focus on specific groups of people, such as students. No matter the specific market, look for population and job growth. If jobs are readily available, the economy is growing. 

Gaming REITs

Not that long ago, MGM agreed to sell the renowned Bellagio resort in Las Vegas to Blackstone Real Estate Income Trust, a move which is regarded as an opener in terms of high-stake deals in the gaming real estate arena. Speaking of which, gaming REITs provide a compelling business model and strong dividend yields, even at times when interest rates are at historic lows. To put it simply, casinos turn out to be a part of a great real estate asset class. With new ventures, there are opportunities for profit, especially in the context that most people don’t have a clue what to do with gaming REITs. Casinos can be standalone and generate gaming revenue or part of a large complex with hotel rooms, restaurants, etc.

REITs prefer to maintain portfolios of regional casinos. Selectivity is of the essence because not all operators have a solid foothold in the gaming ecosystem. Many firms believe that online gaming and sports betting represent a win for land-based casinos, which can derive long-term benefits. Influential casino operators like Slotty Vegas have and will resist online, replacing lost tax revenue (seek Slotty Vegas online casino review and casino games info if you want to know more). You don’t have to travel to Las Vegas to curate a proper REIT, but you do have to do your homework. The casino niche can be complicated. With the growth of gaming as a recreational pursuit, commercial casinos have evolved.

How to analyze which REIT to invest in

As mentioned earlier, some investment vehicles are immune to current events. Even if the economy has fallen a little bit under the weather, there’s no reason to worry. Stock prices won’t start to decline if the sell-off intensifies. The REIT industry has demonstrated that it’s tough and resilient, and puts into practice many valuable lessons. Casino REITs continue to attract investor attention and many argue that the high dividend yields are not a singular occurrence.

There are certain things you need to keep in mind when investing in REITs, namely: 

  • Pay close attention to lease lengths, which can vary greatly between sectors.
  • Take into account the quality of the underlying portfolio.
  • Discover who the sponsor behind the company is.
  • Find the market cap.
  • Don’t ignore overseas REITs.

Finally yet importantly, build a long-term portfolio as a real estate investor. There’s no one size fits all approach, so find what works best for you. Whatever you’re thinking about doing, think things twice.

Comments (2)

Bill Salvatore - YVP Blog
Arizona Elite Properties - Chandler, AZ
Realtor - Valley of the Sun / golfArizona@cox.net

If I could go back to my early 20's, this would be my goal. Make it a GREAT Wednesday. Thanks for sharing.  Bill Salvatore

Mar 31, 2021 05:41 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Great information to pass on to investors that are looking to invest now with low interest rates.

 

Mar 31, 2021 08:19 AM