Things To Keep In Mind When Investing In Non-Traded REITs

Posted by Rodrigo William on September 5th, 2016

In the search for more attractive yields during periods when interest rates go down significantly, investors look for products that can help them accomplish their investment goals. Amongst others, buying shares of non-traded investment trust (REIT) companies offers them the opportunity to invest in assets that deliver steady returns, and while there are many grounds where traded and non-traded REITs are similar, there are certain aspects where they differ too. The most common difference is that non-traded REITs are not available for trading on national securities exchanges. Though investing in these assets may not promise you huge returns like their traded counterparts do, they are better in the sense that they do not behave as erratically as traded REITs. You may have to wait for a period of time to enjoy good returns, but you are pretty much safe from the dilemma and anxiety that traded REITs bring. Having said that, you still should be well acquainted with the features of non-traded REITs as well as the risks or lack of risks that you may face when investing in them.

Having knowledge about the assets you are investing in always helps you avoid misconceptions and pitfalls that come along the way. So, how would you define a real estate investment trust company? Simply put, REITs are companies, trusts, or associations that manage or own income-producing real estate. REITs allow a pool of investors to buy shares in a portfolio of commercial properties. The portfolio features properties ranging from hotels and office buildings to apartments and shopping centers. This provides typical investors a chance to invest in properties that they might not have the financial power to purchase all on their own.

People trying to sell REITs may pitch higher yields than these assets can offer; investors have to be careful and should know what realistic expectations they can have from purchasing them. You should also ask whether there is any additional fee associated with the purchase of the product. The best way to purchase non-traded REITs, keeping in mind all of these things, is through auctions – online or physical. But, before anything else, you should review your financial standing and whether or not investing in a particular product would meet your investment objects. You should also consider the limitations and risks associated with investing in non-traded REITs. Go ahead only when you feel that your investment goals will be met and that you will be comfortable with the risks involved.

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Rodrigo William

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Rodrigo William
Joined: June 6th, 2016
Articles Posted: 5

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