HomeHome SearchSearch MenuMenu Our productsOur products

What are REITs, how they work and which are the best REITs to buy in 2019

by , 07 August 2019
What are REITs, how they work and which are the best REITs to buy in 2019
Q. "I've seen that REITs have become widely spoken about in the news lately, since the Federal Reserve decided to cut the interest rates by 25 basis points to 2%. This has sparked my interest to look into investing in REITs. Timon could you explain briefly what a REIT is, how they work and why the drop in interest rates have attracted investors into buying them?”
 
A. REITs (pronounced REETS) stands for 'Real Estate Investment Trusts'.
 
These are essentially property companies that are listed on the stock market. 
 
The best way to explain how REITs work for investors are in 6 simple steps. 
 
Step 1: An individual decides to invest in a REIT company.
 
Step 2: The money is then collected into a large pool (like all trusts).
 
Step 3: The pooled money is then invested into the property that the company either owns, operates or finances. 
 
Step 4: Over time the company starts to make revenue and profit.
 
Step 5: The profits are then accounted and collected. 
 
Step 6: The profits are then distributed in parts to the initial investors who helped finance the company through a REIT.
 
As with the third question. In my opinion I believe REITs will benefit and gain from the Fed's decision to cut interest rates, as now more investors will deposit their money in different REITs knowing that the property companies will be able to finance their debt at lower interest rates. 
 
________________________________________
 
You’re about to learn how to supercharge your returns… without boosting your risk!
 
But before I begin, I want to make a few things very clear.
 
To participate in this strategy...
 
You do NOT have to be a financial wizard.
You do NOT have to have a large amount of money, and
You do NOT have to have any trading experience.
 
You should also know that this won’t require much of your time either… About 20 minutes a week is all you need.
 
In this letter, you will learn how to use what we call pick pocket trading a simple technique to turn your portfolio into a world-class custom hedge fund.
 
________________________________________
 
Q. "I’m still trying to wrap my head around what kind of REITs us individuals can invest in. Could someone please break them down so I can make a decision?"
 
A. I'll make your life easy and break the REITs, that you can invest in, down into just three categories.
 
Category 1: Equity REITs
 
Most REITs you'll find, fall into this category.
 
This group of REITs are companies that manage and own income producing real-estate where most of the profits (and revenue) are collected from rent.
 
You can invest in commercial property companies such as offices, warehouses or shops. Or you can also invest in listed property companies that own townhouses or apartments.
 
Category 2: Bond REITs (or Mortgage REITs)
 
This group uses the money funded and lends it to real-estate owners through bonds (or mortgages). The profits distributed are from the interest earned on the loan. 
  
Category 3: Hybrid REITs
 
This group is simply just a combination of both REITs. The profits distributed are from both revenue received from rent as well as the interest earned from the property loan.
 
Recommended:
________________________________________
 
“If you want to make a killing from cryptocurrencies – read this bookas FAST as you bloody can!” 
 
I’d like to rush you a copy of my book, Crypto Revolution, right away.
 
Inside you will find everything you need to understand this financial revolution…
 
And take maximum – potentially life-changing – advantage of it.
 
Including the name of the coin I am calling “The Bitcoin Killer”
 
A cryptocurrency that could ultimately climb 20,000% from where it sits today.
 
That’s the kind of move that turns R2,500 into R500k over the longer term.
 
You’ll get the name of that crypto… my full case for why it could rise to become the #1 crypto in the world…
 
And my full analysis on the entire cryptocurrency landscape, all in my book.
 
________________________________________
  
Q. "Timon I'm looking to invest in the following property trust instruments; PUTs, PLSs or REITs. Can you tell me which instrument I should look into and what the best property companies there are to invest in South Africa?"
 
A. I wouldn't worry about the – PUTs and PLSs.
 
Here's why. 
 
PUTs & PLSs or ‘Property Unit Trusts’ and ‘Property Loan Companies’, previously were listed on the JSE stock exchange which have now changed and adapted to REIT Regulatory Frameworks.
 
This means, you won’t have to even look into the first two, which will save you a lot of time researching.
 
Probably the most popular REIT companies to invest in, in no particular order are:
 
1. Investec
2. Hyprop
3. Fairvest
4. Accelerate
5. Growthpoint
6. Fortress
7. Emira Property Fund
 
You can read more about REIT investments from our highly experienced analyst by clicking here...
 
“Wisdom yields Wealth”
Timon Rossolimos,
Analyst, Red Hot Storm Trader


What are REITs, how they work and which are the best REITs to buy in 2019
Rate this article    
Note: 3.5 of 5 votes

Have a trading or investing question? Click Here


Related articles



Related articles


Watch And Learn




Trending Topics