Saturday, February 28, 2009

Buy REITs Online

Now is the time for Real Estate Investment Trusts

If you have been watching all the shifts in the investing markets, you may be a little worried about putting your money into any of them right now. Things have been falling and falling, how do you know where it will be safe to put your cash?

Perhaps it's time to look at some of the other investing options out there like real estate. I am not talking about running around and buying up any extra lots of property you happen to see around you. That comes with a lot of responsibilities and major outlay up front. Not only do you have to have the money to purchase the whole property, but you also have to be able to take care of it and maintain and manage it after the fact. This is a lot to ask for in an investment.

Instead, you may want to look into another type of real estate investing, real estate investment trusts. Real estate investment trusts or REITs are funds where you purchase shares of the investment and a real estate management group of real estate development group uses that money to purchase, build or maintain property ventures. You essentially fund a portion of a property acquisition and management group.

In return for your investment, you will be paid a portion of any profit that the company makes, much like a stock dividend.

While you may be wondering how wise it is to consider real estate in today's tough market, this is exactly why it may be a good time to look at a little more investing. Here's why. Sure, there has been a tough time for the markets. Lending has dropped, defaults on properties are on the rise. We're in tough credit times.

But now let's look at the positive side of things. Most think the slide has slowed and will soon be stopping. Add this to the fact that those capital markets that REITs use to get their funding for expansion and other purchases are low and that means the chances for REITs to get the capital they want to expand has dropped, for now. While you may think this is a bad sign, the truth is this is a time when the value of REITs is lower, meaning you can get in at a lower price. As things settle and go back to normal, your profits will go up and you will see an even greater return on your investment.

This is the time to log onto a website like and find out what REITs are out there, what they are selling for and get yourself in on this low tide so you can enjoy the ride when the financial wave picks up again.

With the other option being putting all of your money away and seeing no growth, what would you prefer?

Money Making Guru Robert G. Allen may have said it best saying, "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case."

REIT Variety

The Variety of the Malaysia REIT Market

If you have a diversified investment portfolio, you probably have put some money into the real estate sector. But have you considered REITs? What about foreign REITs?

Let's start with the basics. REITs are Real Estate Investment Trusts. These are funds that invest in real estate ventures. Consider these as holding companies that take your funds and money from other shareholders then purchases and manages real estate interests such as apartments, condominiums, business buildings and industrial parks.

The way you profit from a REIT is not through the sale of land, but rather the leases and rent that are paid on the properties that have been purchased by the management group.

If you are purchasing REITs that are based in the United States there are specific rules that dictate where the money in the REIT can be spent as well as how the profits from the REIT must be given back to the shareholders.

But if you are planning to purchase REITs overseas, the rules are not the same. One of the countries that have seen a number of REITs open up in recent years is Malaysia. But before you ever invest in a foreign property, you need to know what you are getting yourself into.

Here's a look at some of the rules related to their investments:

Types of Real Estate – When investing in the Malaysian REIT market, your money is only allowed to be used to purchase land, single purpose companies, and companies whose main assets are real estate. With this said, the government of Malaysia also allows REIT funds to be invested in other real estate investment trusts as well as debt securities that are backed by the government.

While this may seem that the government is allowing the company to purchase more things that are not as clearly defined as in the real estate market, they do also have a rule in place that demands at least 50% of the funds in a company must be in real estate or single purpose companies in order for the REIT to be valid. Additionally, their investments into assets that are not real estate related cannot be more than 25% of the fund.

In many respects, this does offer a little more variety, and possibly a little more stability in Malaysian REITs. Since there can be more diversity within the REIT, that often leads to more chance for profit, or at least a larger opportunity that there will be stability overall if one part of the REIT is having a bad time.

Getting involved in REIT investing overseas should always involve a lot of research on your part. Make sure you know what you are getting into, and the rules for that country before you buy. Also, if you are looking at Malaysian REIT investments, you need to remember that no two funds are alike and what one fund has inside may be completely different than the stock that another holds.

Websites like can help you sort through the maze of Malaysian REITs, find the purchases that are best for you and start filling your portfolio as they are also an investing real estate broker.