How Small Investors Can Profit From Commercial Real Estate

October 13, 2015

Real estate investment trusts provide a simple way for people in Minnesota to invest in commercial real estate. While most small investors cannot afford the cost of owning a shopping center, apartment complex or office building, they may be able to afford to purchase shares in a REIT that will often issue dividends from the income that is generated by its commercial real estate properties.

People who are comfortable with the process of investing in the stock market and want to diversify their portfolio may want to consider purchasing shares in a REIT. A REIT allows a person to receive a steady and reliable source of passive income without any of the responsibilities that go along with owning commercial real estate properties outright.

Investors who are interested in REITs can buy shares on the stock market. REITs are considered a very liquid asset because they can be bought and sold in a single day. Although the return on a REIT investment is generally much smaller than the return on an outright investment in a single property, REITs are generally thought to be a safer and more reliable investment. The returns for REIT investments are usually paid out over a long period of time.

Before a person decides to invest in a REIT, they must understand the difference between an equity REIT and a mortgage REIT.An experienced attorney may be able to help a prospective investor to decide what kind of REIT they should invest in based on their financial goals. Legal counsel may also be able to evaluate the commercial real estate properties in a particular REIT to determine if it is a sound investment.

This information is general in nature and should not be construed as tax or legal advice.

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