Finding the Best REITs

By Eric Hammer

Trying to find the best REITs? Here's a hint - there is no one "best." Instead, there is the best for you and the best for someone else. A REIT (or Real Estate Investment Trust) is kind of like a mutual fund for real estate.

Basically, it's a program where you can buy a share in a large number of properties all over the world or in your own country and then make money when the value of those properties go up. We said it's kind of a like a mutual fund, because the best REITs will have their hands in multiple properties, allowing you to gain good exposure to a wide variety of projects without the need to invest millions of dollars to buy multiple properties all on your own.

Most REITs are also tracked by a variety of services, such as Standard and Poors and Moody's Corporation. These companies will place ratings on the REITs and the best REITs will be the ones with the highest scores. However, it pays to remember that, like stocks and mutual funds, REITs can and do lose value (of course, the best REITs also gain value, which is certainly what you might hope for when working with one).

How Much Can You Make?

It's impossible to quantify how much money you could make by investing REITs. Suffice to say that the best REITs should give you healthy returns in much the same way well managed mutual funds will give you healthy returns.

Ways to Make More | Related Opportunities | Tips

If you are interested in investing in real estate but for whatever reason are leery of investing in REITs, there are any number of other ways to do so. For example, you could become a house flipper or, if you have the money to do it, you could simply purchase properties outright, develop them and sell them.

Remember that investing in the REITs, even the best REITs require doing your homework. You'll want to check on past performance and see what the current holdings of the REIT you are thinking about investing in are. Don't just take anyone's word for it that "these are best REITs to buy into" either. You need to decide for yourself.

Remember also that as we noted at the beginning of this article, there is no one "best" when it comes to investing in REITs. Instead, you need to choose REITs in much the same way you might choose stocks or mutual funds.

One investor may decide that they want to buy into REITs that invest aggressively overseas, accepting the fact that this will inherently mean more volatility, but also potentially more money since the property values in some developing countries can rise much more rapidly than those here at home. For others, getting a fairly safe investment means the best REITs for them are ones that invest conservatively in established businesses such as thriving malls where there are already tenants paying rents and where there will be a slow, but steady rate of return. Again, it's a matter of your personal situation rather than any objective criteria. That said, obviously you want to look for REITs which have good track records and which invest in properties you feel comfortable with.

Qualifications / Requirements

The only requirement for finding the best REITs is plenty of time and enough money to invest in REITs once you find the ones you are looking for. It is possible to get started with just a few hundred dollars at some REITs, though most will have minimum investments of at least $1,000.

First Steps

Start by reading as much as you can about REITs and following various investment articles to learn what the best REITs are for your needs.


Check out these helpful resources to learn more about where to find the best REITs for you:

Wikipedia: Real Estate Investment Trust - A good basic introduction to what a REIT is.

Personal Finance Help Center: Just What Exactly Are REIT Funds Anyway? - A good, in depth analysis of what a REIT is and how they work.

Dividend Detective: How to Find the Best REITs - A look at one way of choosing which REITs to invest in.

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