The Variety of the Malaysia REIT Market
If you have a diversified investment portfolio, you probably have put some money into the real estate sector. But have you considered REITs? What about foreign REITs?
Let's start with the basics. REITs are Real Estate Investment Trusts. These are funds that invest in real estate ventures. Consider these as holding companies that take your funds and money from other shareholders then purchases and manages real estate interests such as apartments, condominiums, business buildings and industrial parks.
The way you profit from a REIT is not through the sale of land, but rather the leases and rent that are paid on the properties that have been purchased by the management group.
If you are purchasing REITs that are based in the United States there are specific rules that dictate where the money in the REIT can be spent as well as how the profits from the REIT must be given back to the shareholders.
But if you are planning to purchase REITs overseas, the rules are not the same. One of the countries that have seen a number of REITs open up in recent years is Malaysia. But before you ever invest in a foreign property, you need to know what you are getting yourself into.
Here's a look at some of the rules related to their investments:
Types of Real Estate – When investing in the Malaysian REIT market, your money is only allowed to be used to purchase land, single purpose companies, and companies whose main assets are real estate. With this said, the government of Malaysia also allows REIT funds to be invested in other real estate investment trusts as well as debt securities that are backed by the government.
While this may seem that the government is allowing the company to purchase more things that are not as clearly defined as in the real estate market, they do also have a rule in place that demands at least 50% of the funds in a company must be in real estate or single purpose companies in order for the REIT to be valid. Additionally, their investments into assets that are not real estate related cannot be more than 25% of the fund.
In many respects, this does offer a little more variety, and possibly a little more stability in Malaysian REITs. Since there can be more diversity within the REIT, that often leads to more chance for profit, or at least a larger opportunity that there will be stability overall if one part of the REIT is having a bad time.
Getting involved in REIT investing overseas should always involve a lot of research on your part. Make sure you know what you are getting into, and the rules for that country before you buy. Also, if you are looking at Malaysian REIT investments, you need to remember that no two funds are alike and what one fund has inside may be completely different than the stock that another holds.
Websites like REITBuyer.com can help you sort through the maze of Malaysian REITs, find the purchases that are best for you and start filling your portfolio as they are also an investing real estate broker.
Tuesday, March 3, 2009
REITs: Real Estate Investment Trusts: A Solid Investment Options
REITs – Real Estate with Liquidity and
As many people these days are finding out while real estate seems like a wonderful investment, it can also be a painful one if your investment was in a piece of property that you own outright. Many people who had purchased investment properties or homes they were planning to flip for a profit were sent into bankruptcy in the recent housing market crash.
With that said, real estate has long been the solid investment option for those who like to put their money somewhere that it can see results, but also remain stable.
So, how does one be able to still be involved in the real estate market and not be caught in that same trap? The answer is by purchasing REITs. A REIT is a real estate investment trust. This means it is much like a mutual fund in that a number of shareholders put money into the fund and that money is used to purchase, finance or manage real estate properties. The profits on the fund then come from mortgage interest, rent or lease moneys that come in.
For the most part a return on REITs averages 6-10%. U.S law dictates that 90% or more of the profits on a REIT go to the shareholders, and that makes them a pretty strong investment option.
The short version of what a REIT is, is a way to be a partial owner in real estate.
But with this said, one of the things that many people fear about real estate, being stuck with a property that will not sell in a down market, is not a problem here. Instead, REITs are totally liquid. If you think things are not going to go well in the future of your REIT, you can sell and get out and then put your money back in when things are looking up again. If you do this right, just this can be a big profit maker for you as you will be pulling your money out when the REIT is high and then putting it back in, and getting more shares, when the market is low.
If you are one of those people that think there's no way to know when the market will do well or fail and that it's all luck, that's not necessarily true. As Smith Barney said, "There's blind luck, dumb luck and then there's get up every morning at 5:30 and sweat the details luck. Few people actually stumble into wealth. It takes persistence, tenacity and a tireless work ethic. In the end, luck has little to do with success."
This is also the case here, by doing your own research and keeping on top of the market you will be able to make wise investing decisions. With the help of REITBuyer.com you will be able to do this. REITBuyer.com has all the tools and resources you need to be able to make wise decisions on what REITs to buy and also see when you need to sell. The added benefit by being a part of REITBuyer.com is that not only will you have that information at your fingertips, but also the ability to buy and sell your REITs as they are an investing real estate broker.
As many people these days are finding out while real estate seems like a wonderful investment, it can also be a painful one if your investment was in a piece of property that you own outright. Many people who had purchased investment properties or homes they were planning to flip for a profit were sent into bankruptcy in the recent housing market crash.
With that said, real estate has long been the solid investment option for those who like to put their money somewhere that it can see results, but also remain stable.
So, how does one be able to still be involved in the real estate market and not be caught in that same trap? The answer is by purchasing REITs. A REIT is a real estate investment trust. This means it is much like a mutual fund in that a number of shareholders put money into the fund and that money is used to purchase, finance or manage real estate properties. The profits on the fund then come from mortgage interest, rent or lease moneys that come in.
For the most part a return on REITs averages 6-10%. U.S law dictates that 90% or more of the profits on a REIT go to the shareholders, and that makes them a pretty strong investment option.
The short version of what a REIT is, is a way to be a partial owner in real estate.
But with this said, one of the things that many people fear about real estate, being stuck with a property that will not sell in a down market, is not a problem here. Instead, REITs are totally liquid. If you think things are not going to go well in the future of your REIT, you can sell and get out and then put your money back in when things are looking up again. If you do this right, just this can be a big profit maker for you as you will be pulling your money out when the REIT is high and then putting it back in, and getting more shares, when the market is low.
If you are one of those people that think there's no way to know when the market will do well or fail and that it's all luck, that's not necessarily true. As Smith Barney said, "There's blind luck, dumb luck and then there's get up every morning at 5:30 and sweat the details luck. Few people actually stumble into wealth. It takes persistence, tenacity and a tireless work ethic. In the end, luck has little to do with success."
This is also the case here, by doing your own research and keeping on top of the market you will be able to make wise investing decisions. With the help of REITBuyer.com you will be able to do this. REITBuyer.com has all the tools and resources you need to be able to make wise decisions on what REITs to buy and also see when you need to sell. The added benefit by being a part of REITBuyer.com is that not only will you have that information at your fingertips, but also the ability to buy and sell your REITs as they are an investing real estate broker.
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