Real estate investment trusts are a way to invest in property without actually purchasing the tangible assets. While that may seem uncomplicated, there are many nuances, issues and definitions within a REIT investments, which can be confusing. Knowing the meaning of the key industry terms and how to use them will make the process of purchasing or establishing real estate investment trusts much easier.

The real estate investment trusts (REITs) key terms derive their definition from the legal, real estate and investment industries respectively. If you have a good knowledge within those two business sectors, it'll make the integration of REIT vocabulary a smoother transition. Therefore, to speak about REITs with ease there are few items to consider, such as:

1. Examine the real estate investment trust industry vocabulary of terms.

2. Understand the application of these investment trusts terms.

3. Familiarize yourself with global real estate investments and legal issues.

Action Steps
The best contacts and resources to help you get it done

Use the REIT glossaries to define key terms

Many of the key terms in the REIT industry relate to issues you may be familiar with already. For instance, a mortgage REIT is type of trust where mortgage contracts comprise the assets within the investment vehicle. Most everyone knows the basics of a mortgage and can transfer that knowledge to understand mortgage REITs. However, the most efficient way to understand REIT terms is to use a glossary of definitions.

I recommend: Utilize the alphabetical listings of real estate investment trusts terms at Rentlaw.com. Study the real estate development trust glossary at the National Association of Real Estate Investment Trusts.

Apply the REIT terms to give the definitions context

Definition alone won't help you understand the industry. You'll need to know how they apply to specific situations. For instance, you may know all the clinical definitions of taxation and yield information, but it won't help you start a REIT if don't know the context of those definitions in regards to REITs.

I recommend: Attend online seminar from the Practising Law Institute (PLI) about establishing a REIT. PLI is a non-profit organization for continuing legal education set up by the Regents of the University of the State of New York. You can also examine the article about starting a REIT from KCI Communications to see its key terms in the proper context.

Connect the REIT companies terms to a different industry perspective

Another way to help you integrate the REIT terms into your vocabulary is to see them from the perspective of another industry. The legal and real estate terms you use in regards to REITs can have a somewhat different meaning when speaking with a lawyer or real estate professional.

I recommend: Use Legal Helpmate to know the legal angle of key REIT terms. Learn the broader real estate terms from the REIClub to help you understand the key REIT information.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Real estate investment trust companies are a fine investment when the real estate market is stable. However, in an uncertain real estate market a REIT may not be the best investment of company assets. Therefore, it's vital that you verify the area or sector in which the REIT may be making real estate investments.

Real estate is always a popular investment choice. After all, you are investing in an actual entity when you invest in real estate. It's not a bond that only exists on paper or a stock that is dependent on someone else running a business. One of the more interesting investment vehicles available are real estate investment trusts.

A real estate investment trust, or REIT, is a corporation that invests in real estate in some fashion. Equity REIT companies invest in actual properties, mortgage REITs invest in mortgages and mortgage-backed securities, and hybrid real estate investment trust companies combine the two. Shares in REITs can be purchased on an open exchange, through a mutual fund, or through private connections.

When considering REIT investments to diversify your portfolio, among the key points are:

1. The availability of a REIT in which you’re interested;
2. The management team behind the real estate investment trust companies;
3. The goal of your interest in investment trusts.

Action Steps
The best contacts and resources to help you get it done

Find real estate investment trusts that tickle your fancy

You're more likely to maintain your interest in REIT funds if they cover something of interest to you. Whether you're interested in global real estate investments to dabble in the international marketplace or you're ready to become a U.S. commercial real estate mogul, there are listings of real estate investment trusts that will help find the REIT for you.

I recommend: Yahoo’s listing of real estate investment trust companies is considered to be one of the more diverse available, as it contains REITs of all shapes and sizes. The National Association of Real Estate Investment Trusts offers a search engine of its member REITs that allows you to be as specific in your search as you wish.

Invest in REITs with management teams you know and trust

When you invest in a REIT, you are placing your money in the hands of the management of that fund. It's therefore imperative that you trust the management team behind the Real Estate Investment Trusts. You need to feel comfortable with the direction in which they're taking the group. If you don't know the management team personally, ask for references and do your research before you put down a dime.

I recommend: Cohen & Steers has an impeccable reputation in REIT circles for managing funds. LaSalle Investment Management is another REIT management firm that works both domestically and internationally.

Pursue short- or long-term goals with REIT investments

REIT companies are typically part of your portfolio if you're looking for long-term diversification. After all, their average annual yield of 8% beats many fund and bond averages. However, if you're looking at REIT investments for a quick buck, this is also possible with some funds. So make sure your chosen REITs match your portfolio goals.

I recommend: The National Association of Real Estate Investment Trusts offers a library of REIT data, including performance and index data. Forbes also graded REIT funds to try to find the best of the best.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you're interested in investing in a private REIT, get as many details and references as possible because these are not covered by SEC regulations.

The basic real estate investment trust companies (REIT) are a way to invest in real estate without actually buying any property. There are two types of REITs, the equity and the mortgage. Equity REITs are essentially trust companies that invest in real estate and then sell shares of this REIT on open stock exchanges. Mortgage REITs buy and originate contracts on property rather than purchasing the property itself. Lastly, some REITs use a combination of these two types to fund their trust.

Whether you would like to start a REIT on your own or invest the company assets in an existing one, it's important to know the latest news and trends for the industry. Real estate investment trust companies are also subject to certain regulations that can change with newly enacted laws. Therefore, to remain current on latest REIT rules, trends and news, there are few items to consider, such as:

1. Join a real estate investment trust company association.

2. Subscribe to a REIT investments RSS feed.

3. Utilize REIT company blogs to remain current on the industry.

Action Steps
The best contacts and resources to help you get it done

Contact a REIT association

One of the best places to find real estate investment trust information and news is an association, where you can network with knowledgeable people within the industry. If you don't want to join an association, you can obtain REIT news from an online industry journal.

I recommend: Register at the National Association of Real Estate Investment Trusts for the latest trends in the business. Review the Journal of Real Estate Portfolio Management, a publication of the American Real Estate Society, for real estate news to help learn more about investments.

Use the REIT companies industry RSS feeds

The real estate investment trusts RSS feeds are web-based subscriptions that notify you via the Internet when there's any current information regarding real estate investment trusts news and trends. That way you don't have to search for news and trend. When new information appears, the web browser on your computer will activate the RSS feed.

I recommend: Register at Atlantis Investments for its REIT Growth and Income Monitor feed. Enroll in the RSS feed available at REIT Wrecks. You can also sign up to receive news via email, if preferred.

Review REIT blogs and other industry news sources

Web logs or blogs are a great source of information on REITs, because they're usually updated on an almost daily basis and with a wide variety of information. However, you can't use blogs as your primary source of industry information in that they aren't regulated. Conversely, industry associations, journals and other publications have sources and have more credibility than blogs. REIT journal blogs are the best of breed, since they're a hybrid of the two.

I recommend: Use Inform Technologies to gather all the available information about REITs. This site uses a broader technology than RSS feed to find all the latest REIT news whether its from newspapers, magazines, search engines, portals or non-traditional publishers. Visit the Mortgage REIT Journal blog for regular updates on the industry, including the news and events related to specialty finance companies.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Before forming or investing in a real estate investment company, be sure you understand the tax implications. If you don't have a real estate broker on retainer, be sure to consult one prior to any investment in a REIT.

Real estate investment trusts, often referred to as REIT, is a tax designation that allows businesses to reduce the amount owed on their corporate income taxes by investing in real estate. Those companies that take advantage of REIT investments must distribute 90% of their income to corporate investors.

The idea behind the REIT structure is to provide real estate investment trust companies the same opportunity that mutual funds give to investors: a chance to be able to invest without full ownership. REIT companies can be publicly or privately held, and public REITS can be listed on public stock exchanges. Consider the following ways to receive targeted Real Estate Investment Trusts (REITs) education and training if you are interested in learning more about real estate investment trusts:

1. Associations are a wonderful way to further your education while networking with those who work with or for real estate investment businesses.

2. Keep up with the latest real estate development trust news online.

3. Take courses that will teach you REIT basics.

Action Steps
The best contacts and resources to help you get it done

Tap into associations whose members deal with REIT investments

Associations are a wonderful way to network with others that share similar interests in regard to REITs. Associations also offer special membership learning opportunities in the form of conferences or seminars.

I recommend: The National Association of Real Estate Investment Trusts, offers educational podcasts and webcasts. The National Council of Real Estate Investment Fiduciaries offers seminars and conferences.

Read articles from websites devoted to real estate investment trusts

Frequently updated websites that focus solely on the topic of REIT are a great way to get the latest and greatest information. This allows you to keep your knowledge current and make wise investment decisions.

I recommend: REITCafe is devoted entirely to distributing the latest REIT news and information, the facts on REIT funds, and anything else you can think of with the term "REIT" in it. REITNet is a website designed to help educate its readers with information to be able to evaluate real estate investment opportunities.

Go to an REIT school to further your education and knowledge

Consider attending an REIT school or taking a course that explains REIT basics or REIT nuances. These courses allow you to learn from someone who is knowledgeable in the field. These courses can also serve as a networking opportunity, since the other students presumably share the same interest in real estate investment trusts.

I recommend: The SNL Center for Financial Education features an REIT School analyst course offered in Chicago. California Green Solutions offers courses to learn basic organizational requirements faced by REITs.