Real Estate Investment

UK real estate investment trusts (REITS) have bottomed out and are selling at hugely discounted prices – According to an FT report now is the time buy. Real estate investment trusts work best for those investors who want to diversify their portfolio to include real estate investments too. It also works very well for first timers.

Real estate investment funds give safer returns
A real estate investment trust is a type of fund where a large pool of investors contribute toward the purchase of commercial and other types of real estate investments that are generally out of the reach of the individual. It is very much like a mutual fund for real estate investment. Investors need not undergo the risk and problems associated with owning brick and mortar real estate investment, and usually reap attractive yet safer returns.

Taxes benefits with real estate investment trusts
The most attractive aspect of a real estate investment trust is that rental incomes are tax free. Moreover there are no capital gains taxes applicable on properties sold. In order to get these concessions from the government, a real estate investment trust is required to pay at least 90% of the income it generates from tax exempt rentals, which is more good news for the investor.

Real Estate Investment Trusts vs. ‘Brick & Mortar’
In addition to the tax benefits offered by a real estate investment trust there are several other advantages to be gained over a regular real estate investment. Firstly, similar to a unit trust, you limit your real estate investment within your budget. Secondly, with a real estate investment trust, you get to be part of commercial investment properties usually affordable only to the super wealthy. Lastly since you only own a tradable part of a real estate investment trust, rather than a part of a physical property, you can easily sell your unit improving your liquidity position considerably.