Investing in Public Non Traded REITs: Here?s Why They Are Popular

Posted by Rodrigo William on August 9th, 2016

The fallout from the real estate crash of year 2008 have long been left behind; and as the entire realty sector looks to move on, the appeal of real estate funds is on the up too. With the real estate market in the US showing positive signs, investing in real estate property and real estate based securities is being seen as a safe move. One of the highly sought- after real estate securities is non traded REITs, and have been in the news for one reason or another.

What are Non Traded REITs?

REIT is a concept that is more than a century old, with Real Estate Investment Trusts created by the Congress in 1960 to give the common man an opportunity to invest in commercial real estate. A non traded REIT is a company that invests in income-producing real estate through either commercial or residential property or mortgages. Non traded public REITs are traded on major stock exchanges like NYSE, AMEX and NASDAQ. The company earns profits through rents and is obligated to pay at least 90% of their taxable income as dividends, in order to avoid paying corporate tax on their income.

Investing In Public Non Traded REITs: Why They Are Popular

Steady returns: Non-traded REITs or Non-listed REITs, as they are often referred to, aren't highly-liquid stakes, but offer an investing opportunity that promises steady returns, without the volatility of publicly traded REITs. Comparatively smaller yet steady returns are often amongst the strongest attractions for most of the investors.

Spread Risk With Diversification of Portfolio: Non-traded public REITs allow you to spread risk as they are uncorrelated with equity markets. With a diversification of your portfolio, you are well protected against market downturns.

Tax Benefit: As discussed earlier, since Real Estate Investment Trusts distribute at least 90% of their taxable income as dividends, they do not need to pay corporate income taxes. With the elimination of double taxation of income the tax benefits spread to investors too as part of their dividend income can be considered as return on capital.

Public non traded REITs are one of the most attractive financial securities in the market. With the prospect of owning part of a commercial property being so enticing, if the question “How to buy non-traded REITs” is troubling you, then all you need to know is that they are traded on all major stock exchanges. So diversify your portfolio and own a real estate property through REITs.

About the author: The author is an avid writer. He has written about non traded REITs in this article. For more details visit: http://www.reitbid.com/aboutus