Diversify Your Portfolio with Alternative Investment in a REIT Auction

Posted by jason michalak on May 4th, 2016

The financial world can be volatile, causing people to regularly look for alternative investment options. This helps them diversify their portfolio of securities and spread the risk and a relatively low risk investment, which enables you to do exactly that is investment in real estate. On top of that, investing in real estate will also give you high yields, to make for a greater total return potential of your portfolio.

Most people look at the concept of “investment in real estate” as buying a home to live in or rent out. However, it is also possible for individuals to invest in commercial properties like office buildings, hotels, and shopping malls. And these investments are now a reality thanks to the presence of REITs: Real Estate Investment Trusts. REITs invest in groups of professionally managed commercial real estate properties, and can be bought or sold in a REIT auction or traded on major stock exchanges or can be held in a private trust by individual investors. Even though REIT performance has varied over the years, it has become a very popular investment strategy in the last decade or so, with a significant annual return. Here are the advantages you get from REIT investments:

• Diversification: As discussed earlier, due to the spread of risk and higher yields, REITs give you a great opportunity to diversify your portfolio and protect against potential market downturns.

• Management: Your investments are managed and overseen by a management team, which will do all the research for you, saving you valuable time.

• Tax Benefits: REITs don’t need to pay federal corporate income taxes, because they are required by law to distribute at least 90% of their annual taxable income as dividends. The tax benefits spread to investors too as a portion of your dividend income can be treated as return on capital.

• Steady Income: Non-traded REITs provide you with a revenue stream in the form of monthly or quarterly income, giving you a steady cash flow.

When it comes to buying REITs in the United States,auctions offers you a lot of convenience. This is because you may review the REIT information, terms & conditions, and other information on the sale of the REIT readily available for you to download from online auction sites. On top of that, these auctions are also fair, as the auctions take place in an open bidding format, thus giving everyone the opportunity to bid their best number.

REITs offer you a great alternative investment prospect to get good returns in a manageable risk structure. So, diversify your portfolio and bid in a REIT auction today.

About the author: The author is an avid writer. He has written about REIT investments in this article. For more info: https://www.fre.com