The 11 points that describe REITs is an ideal passive earning avenue
The REIT works in the same way as the stock market or the mutual fund . You will receive dividends from the company and make a profit from REIT stocks when you will sell them .
1 . The high dividend returns are the special feature of the REITs . No other investment can provide you such a high return .
2 . The upfront fee of REIT is not very much .
3 . For a
newbie investor , REIT is the easiest way of starting an investment . You have to only use a brokerage account to buy REIT stocks .
4 . The investment range of REIT is comparatively lower than other investments if you make a comparison . The investment range of REIT runs from $ 100 to it can stretch up to several thousand dollars . REITs are an easy way to build your wealth .
5 . REITs are usually liquid investments . You will be able to buy and sell the REITs in the open market .
6 . The
dividends you will earn from REIT can be increased from time to time when the asset value of REIT ’ s properties will increase gradually .
7 . Investing in REITs is a good option to diversify your portfolio and it can help you to reduce the volatility of your portfolio .
8 . REITs are the best alternative for those people especially
the retired persons and the newbie investors who do not have adequate capital to buy and manage their property .
9 . The real estate market is usually dominated by larger corporations but REIT is giving the chance to small investors to invest in commercial real estate . Generally , REIT is the collective trust among the multiple investors that nonaccredited investors can invest
with minimal dollars .
10 . This longterm investment in REIT is profitable for its liquidity .
11 . Indeed , the historical performance never guarantees the future performance of REIT . Data reveals that from 1977 onward , REITs have earned 12 % on average annually .
One important point to remember is that your income from REIT will never be taxed by the IRS as passive income . Rather the earning from REIT is considered as portfolio income and they will be taxed based on the capital gain tax rate .
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