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Previously, it was mentioned that if property investor could invest in overseas property through a REIT. It was also mentioned that there are two kinds of REITS, a private REIT and a public REIT. While the definition of these investment trusts may not be found in Property Investment Guides, they will be clearly defined herein. Let’s take a look at the Private REIT first, shall we? Private REITs are funds that are not publicly traded on any stock market. They are privately held and investing in a REIT is like investing in a business. When one invests in a private REIT the investment is recouped through dividend payments through the life of the REIT. (Most private equity investments are for a limited time period such as 7 – 10 years) The main benefit of a privately held REIT is that is has the potential to pay huge dividends. The big negative is the fact that shares of a private REIT can not be sold. So, if the REIT loses money there is no way out. But if it makes money, the dividends it pays can be huge. Such is the case with any risky investment. If this type of risk is too much to bear, then there is always the option of investing in a public REIT instead.

Posted by admin, filed under Investments. Date: May 14, 2008, 3:51 am |

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