Working with Real Estate Investment Trust Holding Companies

Use real estate investment trusts to diversify your portfolio

A real estate investment trust, commonly called a REIT, pools investments from a variety of investors in order to purchase properties. These properties become an asset for the real estate holding company. In some cases a REIT purchases mortgage loans.

Investment holding firms can hold residential or non-residential properties. Regardless of the type of properties it holds, the goal of the REIT is to make the investors money. This can be done in a several ways, which include:

1. Purchasing properties at wholesale or at discounted rates and selling them through the real estate investment trust for a profit.

2. Fixing and flipping properties to gain better yields.

3. Renting properties held by the trust holding service at rates over the costs to bring in continued income.

 

Understand how real estate holding companies work

Like most investment opportunities, investment holding companies must abide by rules and regulations. And there are different types of holding companies. Which one you choose to do business with depends on your investment goals.
Try: Architecture411 provides in-depth information on the different types of real estate investment companies, including a description of a hybrid REIT. It also lists the qualifications REITs must have to receive tax advantages. HowStuffWorks covers investing in an REIT and presents graphs and charts to help you understand the payout.

Find a real estate trust holding company that pays high dividends

Working with real estate investment trust holding companies provides you with the opportunity to see a high return on your investment. In order to qualify as a REIT, the corporation must pay out at least 90% of its profit to the shareholders, or the investors. However, if a company pays high salaries to organizational members, you might not get what you expect.
Try: MSN Money provides an overview of what real estate investment trusts do, how they pay dividends and offers advice on choosing an REIT. The Wall Street Journal Online posts an article with top-producing REITs. The National Association for Real Estate Investment Trusts provides a list of 200 publicly traded REITs.

Hire a company to handle your investment with a trust holding service

A professional financial consultant pays attention to the market and can help you with the market side of your investment. The professional may manage your entire REIT portfolio, depending on the agreement you have with them. Usually the consultant takes a percentage of your profit, but it may be worth it to have her handle all the details.
Try: Stradley Ronon Stevens & Young helps broker and transfer investments in REITs. They also provide advise and strategies for tax planning. R J Bland Investments offers investment products and services, facts on REITs and other information.

 

• Land holding companies are often real estate investment trusts dealing specifically with land. The company may work with either undeveloped or developed land.

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