REAL ESTATE: REIT’s and foreclosures | Opinion
REIT stands for Real Estate Investment Trust. A REIT is a company that owns and manages real estate as an income generating investment. The company is funded by numerous investors who buy shares in the REIT.
You may be wondering … What properties are you investing in? Where do you get the real estate from? Who owns the REIT?
REIT companies invest in real estate everywhere. They buy real estate and rent it out at a profit. Individuals buy stocks in the REITs as an investment based on the value of the property. Owning stocks in a REIT is an easy way to invest in real estate without being responsible for owning and maintaining real estate and improvements. These investments are also very liquid for the stock buyer, so unlike real estate, they can be easily bought and sold.
REITs have been buying property at a discounted price for years. As an individual, you may have tried to find a foreclosure business but there isn’t much available and there is usually a lot of competition for a foreclosure property.
REITs have the opportunity to acquire many foreclosed properties at the same time. This ability helps the financial lending companies by getting these properties off their books and helps the property market by not being flooded with foreclosure offers and the price of property going up rather than going down.