Right now is the right time to consider real estate investing. Despite rising interest rates and soaring prices, taking a stake in real property remains a long-term path to prosperity and deserves consideration in any portfolio. There are numerous ways to get involved, including physically buying and owning property, either to rent or flip. That takes a lot of money and time, though, especially if you’re directly managing a rental property or two.
But you don’t have to be that active. Investors can enjoy a lifetime stream of passive income by choosing instead to invest in properties managed by other people.
For my money, the best place to plunk down your first $5,000 in real estate investing would be in a publicly-traded real estate investment trust (REIT).
Why REITs are a great place to start
These companies own portfolios of income-producing properties and operate in nearly every industry, including mobile towers, malls, multifamily and single-family rentals, industrial warehouses, self-storage, farm and timberland, and offices.
Because they’re publicly traded, they also provide liquidity and reporting transparency, and REITs are required by tax law to distribute at least 90% of their taxable income to their shareholders. That makes them a steady source of income, and among the 225 or so publicly traded REITs, there are a lot of attractive choices for that $5,000 you’re looking to invest in real estate.
One good example is one of the most widely held: Realty Income ( O 1.19% ). Based in San Diego, this REIT specializes in freestanding, single-tenant commercial properties operating through triple-net leases, which means the tenant is responsible for taxes, insurance, and maintenance.
Realty Income boasts a portfolio of more than 11,000 properties in the United States, United Kingdom, and Spain, with a roster of more than 1,040 clients led by a who’s who of retailers such as Walgreens, Dollar General, and 7-Eleven.
This REIT is one…
Read complete post here: