6 Things to Know About REITs


REITA real estate investment trust (REIT) is a publicly traded entity that owns, operates, or finances income-generating real estate. By putting your money into a REIT, you are essentially buying a tiny piece of a portfolio owned by a corporation (or trust). As their portfolio appreciates, the trust pays out dividends to the investors.

Relative to other investment options, REITs are far less time-consuming and labor-intensive and may generate steady income stream for investors. On the flipside, they offer little in the way of capital appreciation. Here’s what you need to know about this investment strategy!

Equity REITs vs Mortgage REITs vs Hybrid REITs

There are three types of REITs: Equity REITs, mortgage REITs, and hybrid REITs. Most REITs are equity REITs, which own and operate income-producing real estate. As its name suggests, mortgage REITs provide financing for income-producing real estate by purchasing or originating mortgages. This model earns income from the net interest margin. Hybrid REITs are a combination of the other two strategies: equity and mortgage REITs.

Publicly traded REITs vs non-traded REITs vs private REITs

A traded REIT trades on a public stock exchange, such as NASDAQ and NYSE. They are regulated by the U.S. Securities and Exchange Commission (SEC). Non-trade REITs are registered with the SEC but don’t trade on public stock exchanges. Though they are less liquid than publicly traded REITs, they tend to be more stable. Private REITs, on the other hand, are not registered with the SEC and don’t trade on a public stock exchange. Private REITs aren’t accessible to most investors.


REITs distribute dividends to investors on a monthly basis. As required by law, they must pay 90% of income back to investors. The other 10% can be reinvested into the REIT to buy new holdings.


There are management fees associated with all REITs. REITs are managed by a board of directors and trustees. It is important to find out who’s behind the management team, their track record, and compensation model. If the compensation model is performance-based, there is an incentive for the team to pick the right investments and strategies.


The dividends you earn from REITs are taxable up to the maximum rate of 37%. However, taxpayers may deduct 20% of their dividend income.


REITs are an accessible investment strategy. You can invest in publicly traded REITs by purchasing shares through brokers, such as Fidelity or TD Ameritrade. You can also buy shares of non-traded REITs through a broker or financial advisor who participates in the non-traded REITs offerings. The SEC has a free search tool that allows you to look up if an investment professional is licensed and registered.

When investing in REITs, be sure to consider your financial goals and how they align with the strategy you want to pursue. Publicly-trade REITs are easier to buy and sell than actual properties, but they are subject to market volatility. The longer you hold on to it, the more time you’ll have to recover from potential dips.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

5 Up-and-Coming Cities for Real Estate Investors

Raleigh NC real estate investorsWhile there are no hard-and-fast rules to real estate investing, most real estate investors share a host of common traits. These shared attributes include an entrepreneurial spirit, adaptability, and ambition within reasonable bounds. Additionally, successful investors benefit from a fair amount of extroversion and love of networking. To find the hidden gems of real estate and get the numbers to add up, they will often do the upfront work of connecting with real estate agents, cold-calling sellers, and dealing with contractors.

By and large, the best places to invest in real estate will feature high rental occupancy, high rents vis-à-vis your mortgage payments, and the expectation that the value of the property will continue to appreciate over time. However, to determine the best cities for real estate investors, one has to consider a multitude of attributes beyond market dynamics and macroeconomic factors, including tax and regulatory framework and quality of life measures.

Here are the top 5 cities for real estate investors based on CrowdStreet’s Top Real Estate Markets in 2021:

  1. Raleigh-Durham

With its proximity to top universities, world class research facilities, a highly educated workforce, relative affordability, and increasingly walkable urban center, there is just so much to be bullish about regarding Raleigh-Durham’s future, arguably one of the nation’s hottest “work from anywhere” markets.

  1. Austin

Austin is a market with an unfair number of competitive advantages. Strong population and job growth (with a thriving tech scene), the presence of the state capital, a major research university, and location within a tax-free state combine to provide a strong long-term outlook.

  1. Phoenix

Phoenix is the top market in the West. A 2020 exodus from urban CA locations has bolstered already strong underlying fundamentals in the city. Arizona also ranked #5 for inbound moves in the Annual 2020 United Van Lines Moving Study.

  1. Salt Lake City

Consistent population growth, low unemployment, and tight vacancies are perennial attributes of this market. Salt Lake City is maturing and becoming more institutional in nature.

  1. Dallas-Fort Worth

Dallas-Fort Worth continues to unlock new areas of growth via fresh development. Consistent growth, a business friendly central location, and a favorable tax environment provide strong underlying fundamentals for both multifamily and industrial strategies.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

Creative Strategies to Maximize Real Estate Investment Gains

Real Estate Investor

Real estate investment

Real estate investors are always on the lookout for the most profitable opportunities, whether it be renting out properties or flipping houses for resale. While it is undeniable that these proven strategies offer great potential, it often pays off to think outside the box and look at properties from different standpoints. Here are four creative, long-term strategies for new and seasoned real estate investors, as outlined in a Forbes article.

  1. Buy a single-family home on a lot with multi-unit zoning

If you are considering buying a single-family home, take zoning into account. By purchasing a single-family home that sits on lot zoned for multi-family development, you can reap more benefits in the long run than meets the eye. For example, you could rent out the home for income until you have the wherewithal to raze the house and build a multi-unit property in its place. Alternatively, you could sell the home to another developer who might be interested in building a multi-unit property on the lot.

  1. Buy a multi-unit property near an area marked for development.

When plans for a new development such as a commercial district are afoot, a planning permit will be posted long before the building permit is issued. Keep your eyes out for these advance notices on your county’s website and search for multi-unit properties in the vicinity of the new development. Once the new development is near completion, you can expect your rental rates to rise significantly as the demand for the area increases – even if you don’t update the units.

  1. Buy parking lots during the economic downturn.

With the shift to remote work due to the pandemic, the value of parking lots in downtown areas have dropped. This is a good time to purchase a parking lot at a reduced price. As more people get vaccinated and the commute to downtown areas picks up steam, you can expect higher returns on investment (ROI) from such a deal. Not only do parking fees in high-density zones provide steady income, but the lot also has a high resale value for potential developers.

  1. Buy a single-family home near a university with zoning to build an ADU.

Pay close attention to the zoning regulations and consider purchasing a single-family home that allows the possibility of building an additional dwelling unit (ADU). This is especially appealing in properties near colleges and universities, as buyers may derive income from these secondary housing units. Many families buy an investment property with an ADU near their child’s college so the student can rent out the space and offset their expenses.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!

4 Habits Successful Real Estate Investors Share

Real Estate Investors

Real Estate InvestorsNot long ago, it seemed as though an entire generation had been doomed to live out their adult years paying rent. Millennials were often portrayed in the media as a generation of renters. Other outlets spoke of the housing crunch affecting millennials in rather striking terms and likened the debate around housing policies to “generational warfare.”

While rising home prices still present a formidable challenge to the cohort of young adults – especially in larger urban areas – more and more millennials have taken the jump toward homeownership in the last few years. A 2021 report by the National Association of Realtors on generational real estate trends revealed that millennials currently make up the largest group of homebuyers at 37 percent.

The allure of homeownership comes from the fact that owning a property is one of the fundamental ways of accumulating wealth. In addition to the amount of equity you accrue as you pay down your mortgage, cash flow is a key part of the equation when it comes to building up a stronger financial future. That’s where real estate investing comes into play.

The benefits of investing in real estate include passive income, stable cash flow, tax advantages, and more. If you are ready to jump on the real estate investing bandwagon and take advantage of the current low mortgage rates, make sure you have a game plan in place that will set you up for success and pave the way to financial freedom. Here are four habits successful real estate investors share:

  1. Build Credit

Before you get started in real estate, make sure your finances are in good shape. There is no easy answer as to what credit score you need for a residential or commercial investment property loan as credit requirements can differ greatly among lenders and are based on numerous factors.

As is the case with other loan types, a good credit score will help you secure lower interest rates and more favorable conditions that might require little to none of your own cash up front. Another key factor lenders will look at is debt-to-income ratio (DTI). Your DTI is all your monthly debt payments divided by your gross monthly income. With a lower DTI and the income to support it, you are able to qualify to borrow a larger amount of money.

  1. Make a Plan

Figure out what your short and long-term goals are and solidify them into a business plan. The investment model best suited for you really depends on why you are in real estate investing and for how long you plan to keep the property. Some people may be eyeing passive income, while others have a goal to invest for retirement. Setting your goals from the outset will allow you to zero in on the type of property you should invest in.

  1. Develop a Niche

When you develop and invest within your niche market, you are better able to outperform your competition and secure superior deals as you can target your audience more efficiently and identify pain points to minimize your risks. Once the investor has dominated a particular niche, they can then move on to other niches using the same in-depth approach.

Single-family or multifamily homes, retail or office buildings, industrial or commercial properties, mobile homes, land, student housing, and short-term rentals are just some types of assets you could potentially invest in.

It bears mentioning that a focus on a niche does not necessarily mean being confined to a single location. Make sure that the numbers make sense for you, whether it be investing in smaller cities where prices are lower or in large metropolitan areas.

  1. Invest Now

The current low interest rates make it the perfect time to start investing in real estate. In addition, home prices are expected to continue to rise throughout 2021 for various reasons, one being a bullish stock market.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!