Q: I'd like to invest in real estate by buying stocks rather than property. Is there a way to do this?
A: So you want to take advantage of battered property values, but don't want tenants calling you in the middle of the night about a leaky faucet?
If that sounds like you, then yes, investing in real estate indirectly makes sense. There are ways to put real estate in your portfolio without buying a house, apartment ior office building. In fact, there are many ways to do it.
One of the most obvious is to invest in a real-estate investment trust. REITs are corporate structures that organize property into a holding company. There are unique rules to how REITs operate, making them different from a typical operating company.
And there are many REITs that trade on major stock exchanges. But remember that if you invest in just one REIT, you are assuming the risk of that particular company's property portfolio. For instance, if the company is heavily concentrated in Florida, a downturn there can mean big trouble for a REIT focused on that area.
One way around this problem is to buy a real estate investment trust mutual fund or exchange-traded fund (ETF) that invests in many REITS. Once such is the Vanguard REIT ETF (VNQ).
via www.usatoday.com
Comments