Elias Gerden Case Study

Advantages to Investing in Real Estate Investment Trusts

 we studies about what Real Estate Investment Trusts (REITs) are. We also understood that they have become remarkably popular in a very short span of time and that they have a place in virtually every portfolio in the United States. We also learned that this trend is fast spreading across the globe.
However, we did not fundamentally understand the factors that were underlying this Real Estate Investment Trust (REIT) boom. In this article, we have listed down some of the factors which make investing in these trusts lucrative and profitable! The advantages to investing in Real Estate Investment Trusts (REITs) are as follows:

Liquidity

Liquidity is the foremost reason that anyone would want to invest in REITs. Real estate as an asset class is known to have a good risk return profile. This means that it provides great returns and the risk of downside is not as high when compared to other investments.

However, real estate as an asset class has a significant drawback which is that it is highly illiquid. Investors who want to cash out on their real estate investments have to wait for weeks (if not months) to do so. This is where investing in Real Estate Investment Trusts (REITs) comes to the rescue.

The securities sold by REITs are listed on many exchanges across the world. As such they can be bought and sold like shares of a blue chip corporation! Therefore investors who put their money in Real Estate Investment Trusts (REITs) get the benefit of extremely high liquidity which was virtually unheard of in the real estate market.