/REIT Investment Challenge/
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REIT Investment Challenge
$100.00 invested each month in a Real Estate Investment Trust (REIT)
There is no end date for this challenge
I love real estate. For some reason I’ve always had a thing for real estate and it might have to do with where my career has taken me and the clients I’ve worked with who had rental properties. Now a REIT is NOT a rental property. A REIT is basically a collection of investors that poll their money together and use the money to purchase real estate. As part of the formation of the corporation that purchases the real estate, they request the Internal Revenue Service for REIT status so that taxes are done differently (pass through entity type). REITs can trade just like stocks and mutual funds (including index funds). The underlying investment is real estate. The nice thing about these types of investments include:
1) Hands Off Approach - You own the stock and the company manages the property.
2) Easy to Transfer Ownership - Since you own the stock that owns the company which owns the property, you can just sell the security when you don’t want to own the REIT. It’s a little bit more complicated when you own rental properties.
Some additional information on this challenge:
All dividends and capital gains distributions are reinvested into the securities. Those numbers are often not included in the amount invested when reviewing the investing challenge reports.
At Financial Grit, we do not recommend investment options nor do we offer investing advice. You should contact a qualified professional when making investing decisions.
Each month, I will prepare a investing challenge report and it will be posted right here so you can watch the process. It is not always good news, but it will show you where our investment balance is at that particular time.
We will compare our results with an expected return of 7%. Over a long period of time 7% would be a conservative return. After 25 years, this account should total $81,479.71 after contributing $30,000. Yes, you heard that right. If you stash $100 each month for 25 years and can achieve a return rate of 7%, you’d have little under $81,500 which means you would have earned more than $50,000 by doing nothing.
Investment Disclaimer: A prudent investor should seek professional advice regarding any investment choices one decides to take. Before investing in any type of investments, you should be knowledgeable in the investment and understand the risks involved with making such financial decision. You can lose all of your investment when investing in investment securities.