Rising Real Estate Sales and REITs: Is it Time for Investors in Michigan Real Estate to Buy?

Posted in Investors Michigan Real Estate by Michigan Real Estate Expert on February 26th, 2010

With rising real estate sales, many investors in Michigan real estate are starting to wonder if Real Estate Investment Trusts are once again a potential opportunity. Home sales have gone up for the past six months in a row, homebuilding price indexes are rising and investors are turning optimistic. Is it really a good time, though?

What are REITs?
REITs are Real Estate Investment Trusts. These trusts invest in property then sell shares to people or businesses. If the REITs make a profit, that profit is split between shareholders as dividends. Many investment trusts cover a full portfolio of Southeast Michigan real estate and other real property, rather than just one property. In the past, they’ve been incredibly popular because they trade like stock and dividend yields are normally at the top of the market.

Not All REITs Are Created Equal
It’s important to remember that real estate investment trusts come in different shapes and sizes. As well, REITs report rental income, rather than sales, as revenue. Keeping rental income in mind, it becomes obvious REITS with long-term leases and high occupancy rates are generally better than others to invest in. Also, the higher the occupancy, the easier it is to raise rental rates (although this is probably not good business at this time due to the current real estate market).

Investing in REITs Now
If you’re thinking of investing in REITs now, don’t forget that they may only benefit in a particular market. For instance, many individual investors in Michigan real estate are purchasing unfinished homes at steep discounts, investing a little more to finish the homes and then renting them out. As most real estate agents, blogs, articles and magazines will tell you, the rental market is doing quite well, so this may be a viable option for you.

No matter what type of Southeast Michigan real estate you’re thinking of investing in, remember that any type of investment is risky. Is it time to invest? Ultimately, only you can make that decision. Do your research, check your funding, then – and only then – make an informed decision.

If you’re one of the investors in Michigan real estate and are interested in finding good Southeast Michigan real estate investments, I can help. Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof sells North Woodward Homes in Oakland County Michigan

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640

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