| For many years, investing in the stock market | | | | mortgage payments, a REIT must annually |
| was anything but easy. As an investor, you had | | | | distribute as dividends to its shareholders at least |
| to carefully research which stocks to buy, decide | | | | 90% of its taxable income. |
| how much weight to give to the advice of your | | | | As with mutual funds, REIT shares are liquid; |
| broker, then monitor the ticker carefully to | | | | shares can be sold at almost any time. And, again |
| determine whether to hold, and when it was time | | | | like mutual funds, the investment is passive - the |
| to bail out. | | | | individual shareholder is only faced with one |
| But the advent of mutual funds provided a much | | | | decision: which REIT to own. All other choices are |
| more hassle-free path to stock market investing | | | | left to the REIT administrators. |
| for individuals who liked the idea of turning over | | | | On the other hand, a REIT doesn't give an |
| the decision-making to experts. By buying shares | | | | individual owner any choice in which properties or |
| in a mutual fund, the individual investor placed his | | | | mortgages are purchased - once you invest in a |
| money in a pool, alongside the funds of many | | | | REIT, you accept the decisions of others. |
| other shareowners, which was then used to | | | | A REIT can certainly be a good choice for an |
| purchase a large portfolio of securities chosen by | | | | investor who's looking for a way to get involved |
| market professionals. If the fund managers did | | | | in real estate while keeping the complexities to an |
| their homework well, the value of shares in the | | | | absolute minimum. At the same time, you may |
| fund would grow nicely; inevitable losses from | | | | also want to look into a land investment vehicle |
| some holdings in the portfolio were offset by | | | | that's as hassle-free as a REIT, but offers some |
| broad gains elsewhere. And the mutual fund share | | | | other features as well. That vehicle is LandBanking. |
| owner had no day-to-day decisions to make, once | | | | Unlike REITs, which are primarily income vehicles, |
| he selected the fund that looked right for him. | | | | LandBanking is aimed at medium to longer-term |
| Finally, mutual fund shares were liquid - the | | | | growth. The basic LandBanking concept is nothing |
| individual investor could pull money out of the fund | | | | new - acquire undeveloped real estate parcels |
| much more easily than a conventional securities | | | | that are located just outside burgeoning growth |
| owner. | | | | centers, hold the land until local expansion |
| Today, the REIT - Real Estate Investment Trust | | | | demands make it attractive to developers...then |
| - brings the mutual fund idea to the field of real | | | | sell at a solid profit. |
| estate investing. REITS are perfect for Individuals | | | | While you can be your own LandBanker, there |
| who would like to position their investment dollars | | | | are also LandBanking partnerships that make |
| to take advantage of real estate's profit potential, | | | | investing as hassle-free as REITs. But in this case, |
| but are wary of the complications of conventional | | | | your "share" will be an interest in a carefully |
| investment choices like rehabs or new | | | | selected land parcel, chosen by LandBanking |
| construction, or are too busy to acquire the skills | | | | experts for its location and imminent appreciation |
| needed to navigate the real estate mine field. | | | | potential. |
| Instead, they can now buy shares in a REIT and | | | | If you don't agree with their analysis, you can just |
| let a team of professionals navigate the mine field. | | | | move on to the next opportunity. But if you |
| Almost all REITs fall into two categories. They are | | | | agree, the process is simple and straightforward |
| either Equity REITs or Mortgage REITs or a | | | | and once you've become a LandBanker, you can |
| hybrid of the two. Equity REITS use their pooled | | | | just sit back and watch your land appreciate with |
| funds to acquire income producing properties - | | | | no hassles or headaches. |
| residences, office buildings, shopping centers...etc.. | | | | If you'd like to learn more about this LandBanking |
| Mortgage REITs invest in income producing paper, | | | | opportunity - and how it stacks up against REITs, |
| by providing mortgages directly to property | | | | as well as other real estate investment choices - |
| owners or operators or by purchasing existing | | | | you'll find more information in the link below. |
| mortgages. In both cases, whether from rents or | | | | |