What Is a REIT, and Is It Right for Your Portfolio?
Securing financial freedom these days requires much more than saving paychecks and contributing to a 401(k). Many consumers are looking to make smart investments now, so they have fewer financial worries both in the near future and when they're preparing for retirement.
You've probably heard that investing in real estate is a smart move, but many take that to mean they should purchase a rental property themselves. And that involves finding renters and maintaining the property, which might be easy in certain areas, but not in others. If you want to invest in real estate but don't see viable properties near you, what are your options?
A real estate investment trust, or REIT, could be just the answer you're looking for. And DiversyFund can help you get started.
What Is DiversyFund?
DiversyFund is a company whose goal is to give everyone the ability to invest like the 1%. It helps Americans diversify their portfolios by providing access to investments like commercial real estate.
The company's Growth REIT is a public, non-traded REIT. It was "built for the everyday investor," according to DiversyFund, as it has a lower buy-in than other investments. And it ensures investors are "instantly co-owners" in DiversyFund's portfolio of real estate assets. Since this REIT handles all the management, renovations, and selling, you don't need any real estate experience to be a part of this model.
What Is a REIT?
If you're asking yourself, "What is a REIT stock?" or "What does REIT stand for?" the answer is simple: REIT is an abbreviation for "real estate investment trust." But what does that really mean?
Simply put, a REIT "is a company that owns and operates income-generating real estate assets," DiversyFund states. Individuals who opt for this method of investment will invest their money in a REIT, and then the REIT uses the capital to purchase properties.
Different kinds of REITs exist, including publicly traded, public non-traded, and private ones. Each REIT usually focuses on a single real estate sector. Some examples include apartment buildings, health care facilities, hotels, retail centers, and self-storage facilities, though DiversyFund focuses exclusively on multifamily apartment buildings.
How Can You Make Money With a REIT?
There are a few different ways to earn money by investing in a REIT. DiversyFund works by taking your investment and using it to acquire, manage, and renovate properties. Then, the income generated is reinvested automatically, as the REIT follows a growth strategy meant to maximize return potential over a 5-year term.
Is a REIT Right for Your Portfolio?
A REIT can be an easy way to diversify your portfolio, but whether it's appropriate for you is going to depend on your individual situation. With DiversyFund, you can create a free account, and then learn more about how it works. And with a minimum buy-in of $500, it could cost less to start investing in REITs with DiversyFund than it would with other companies.
Additionally, DiversyFund is focused on multifamily properties for their Growth REIT because of the sector's rising demand. It's open to all investors, too, whether they're accredited or not.
Disclaimer:
Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in partial or total loss. Neither DiversyFund nor any of its affiliates provides tax advice or investment recommendations and do not represent in any manner that the outcomes described herein or on the Site will result in any particular investment or tax consequence. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. Neither DiversyFund nor any of its affiliates assume responsibility for the tax consequences for any investor of any investment.
