Types of Real Estate Investment Trust (Further Explained)
The types of Real Estate Investment Trusts are:
Equity REITs: Equity REITs are REITs that own the properties they invest in (and are responsible for their assests). They mostly generate income from the rents from the estates.
Mortgage REITs: Mortgage REITs don't own the properties they invest in. Instead, they loan money (for mortgages) to owners of real estate, or they purchase existing mortgages. They mostly generate income from the interest they earn from the mortgage loan.
Hybrid REITs: Hybrid REITs, as the name implies, use both strategies of equity REITs and mortgage REITs. They generate income from both rents and mortgage interests.
Investing in REITs:
The people (public) can invest in REITs by purchasing their shares on an open exchange. Alternatively, they can invest in a mutual fund that specializes in "public real estate".
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