REAL ESTATE INVESTMENT

TRUSTS

By Philip Cyburt

REAL ESTATE INVESTMENT TRUSTS

Recent reporting has returned to the REIT (Real Estate Investment Trust), a security that can be traded publicly, offering investors a direct way to invest in the real-estate market while maintaining liquidity, and often negatively correlated to stocks. Some find them attractive for these reasons, as well as for the fact that the return is currently almost double that of the ten-year treasury note. 

REAL ESTATE INVESTMENT TRUSTS

However, investors should be careful before entering this particular sector of the market. While the current rate of return is higher than other forms of long-term investment, there are some things to consider before moving funds out of bonds or treasury notes and into REITs. REITs, because of their higher yields, are likely to be risky investments. They have also recently seen an uptick in investor interest, which has driven their value upwards. Since investors are prone to following trends instead of leading them, it is possible that their value will suddenly drop with the changing tides of market interest. 

REAL ESTATE INVESTMENT TRUSTS

This is not to say that REITs make for poor investments, but it is essential that one understand what role they might play in a portfolio before too-enthusiastically transferring funds from lower-yielding, safer investments and into REITs.

REAL ESTATE INVESTMENT TRUSTS As CEO of the Laurus Corporation,

Philip Cyburt has over twenty-six years of experience in real estate investment in properties around the globe. In his previous position as President of the Boeing Realty Corporation, Cyburt managed a billion-dollar real estate portfolio that spanned sixty-three countries.