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Tom Meaglia, ChFC®, AEP®,
CLU®, CRPC®, MSFS
Chartered Financial Consultant
Investment Advisor Representative
Chartered Retirement Planning Counselor
CA Insurance Lic. #0567507
Meaglia Financial Consulting
2105 Foothill Blvd., #B140, La Verne, CA 91750
Toll Free: 800-386-3700
Bus: 909-593-6105
Cell: 818-681-8600
Fax: 909-593-6120
Email: tom@meagliafinancialconsulting.com
Website: www.meagliafinancialconsulting.com
July/August 2020
Getting Real
Real estate is a way for investors to grab a personal piece of the American Dream — their own homes — but it may also prove to be a smart addition to your investing strategy while potentially providing a steady stream of income.
What’s a REIT?
A Real Estate Investment Trust (REIT)* must organize as a corporation, trust, or association managed by at least one trustee or director, and it must include transferable shares held by 100 or more persons, among other requirements.Through a REIT, investors buy shares of properties like office buildings, hotels, warehouses, shopping centers, consumer housing rentals and mortgages. REIT shareholders don’t have to manage the daily upkeep of these properties as they would if they owned these or any properties directly.
Don’t confuse REITs that trade on public exchanges with non-traded REITs and private real estate funds. The latter type of real estate investment is not subject to the same extensive rules that govern REITs, and their shares often will not be as liquid as REIT shares.
Part of the Picture
Often considered a fourth asset class (along with stocks, bonds and money markets), many REITs have high liquidity because they trade on public exchanges. They must return 90% of their income to shareholders as dividends, and they’re subject to many of the rules other publicly traded investments must follow.While REITs provide a way to diversify among asset classes, they may also offer diversification** within the asset class. For instance, a REIT may include commercial and residential properties that vary by type, geographic location and income expectations
Before investing in a REIT, you need to understand whether or not it is publicly traded, and how this could affect the benefits and risks to you. Ask your investment professional for more information about REITs.
*REITs involve risks such as refinancing, economic conditions in the real estate industry, change in property values, dependency on real estate management and other risks associated with a portfolio that concentrates its investments in one sector or geographic region. Shares of any REIT are not suitable for all investors.
**Diversification does not ensure a profit or protect against loss in a declining market. Past performance won't guarantee future results.
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