5 Benefits of Investing in a REIT Sooner Rather Than Later

5 Benefits of Investing in a REIT Sooner Rather Than Later
Written By
Carl E. Sera, CMT
Published On
August 10, 2023

Investing in REITs tends to entice real estate investors who want quick profits. So, here are the benefits of investing in REITs sooner rather than later for investors.

Short Path To Profit

There’s only partial truth in tenants paying monthly rent higher than your mortgage payment and creating profit. Investment property rent should cover your mortgage payment, property taxes, HOA fees, home insurance, maintenance, property management fees, and other miscellaneous costs.

You can calibrate your rental rates just right if you have professional P&L (profit and loss) experience, effectively covering mortgage and side payments with interruption. You can achieve quicker profits through proper P&L statement experience.

Higher Yields

REITs have the potential to reach high yields via dividend payouts. Rental income creates a steady cash flow if there’s a consistent stream of tenants. Furthermore, REIT investors also have capital appreciation opportunities through REITs, as commercial real estate prices increase steadily over time.

Residential apartment rental rates historically increased, meaning REIT holding apartment dividends and other residential areas can increase. It’s crucial to remember that REITs yields depend on upfront investment fees, occupancy and location, and management fees.

Portfolio Diversification

One benefit of investing in REITs as soon as possible is portfolio diversification. REITs are helpful tools for companies, as they offer a more straightforward entry into the real estate market compared to other real estate investments. REITs allow investors to invest in a bigger real estate asset variety if purchasing properties for themselves.

Creating a more diverse investment portfolio comes through pool funds accumulated with other investors. Furthermore, investors can also choose from a mix of mortgage REITs and equity to further diversify their real estate income earnings.

Available REIT Share Liquidity

REIT share liquidity can occur because real estate properties take weeks or months to sell. Investors who wish to benefit from real estate investments won’t have to wait to cash out, as REITs can provide them with liquidity opportunities. Publicly traded REIT shares offer high liquidity due to being readily traded through public security exchanges.

Publicly traded REIT shares tend to attract real estate investors as they take less time to complete than direct investments into real estate properties. Because private REITs don’t sell through public security exchanges, not all REITs offer liquidity opportunities.

Flexibility and Transparency

Many investors choose REITs due to their flexibility and transparency. Because purchasing shares in REITs is a straightforward process, it’s an accessible passive income that’s flexible for investors. Investors can choose three REIT types that best suit their investment goals.

Investors purchasing publicly-traded REITs provide a level of protection via transparency. Due to being traded on the public stock exchange, information about trends and share prices is widely available.

Sera Capital offers its REIT experience and services to individuals with highly appreciated assets. The benefits of Section 721 C Partnerships allow increased investment liquidity and portfolio diversification, alongside capital gains tax deferment and recapture tax depreciation. Ask about our services and expertise today.

Carl E. Sera, CMT

Carl E. Sera, CMT

Managing Principal, Sera Capital
Carl Sera is a Chartered Market Technician and the Managing Principal at Sera Capital Management, LLC. He has over 14 years of experience in the financial services industry with a focus on investment management.

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