How can I invest in real estate?
We couldn’t get Donald Trump on the phone but we guess he would tell us to buy a house already! Ruth Hayden, a CFP in St. Paul, Minnesota, agrees. “It’s the best move and an investment you can see, touch and control,” she says. “But you also have the responsibility of taking care of the property.” If you don’t feel ready to mow the lawn, or it’s not financially wise for you to settle down in a split-level ranch right now, you can still get a piece of the market with a Real Estate Investment Trust (REIT). It’s kind of like a real estate mutual fund where one company owns a bunch of investment properties, like apartment buildings, shopping centers, and hotels, and individuals can buy shares as if they were buying individual stocks. Did you hear that? It’s the sound of a diversified portfolio! Adding an REIT to your investment strategy is a pretty reliable and long-term plan for reaping the rewards. Dividends are paid out on a steady basis as part of the rules that govern REITs, which say they must take at least 90 percent of taxable income and give it to shareholders. That’s you! And you’ll never be asked to clean out the gutters.
by Alonna Friedman
4/25/08
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