Real Estate Investment Trusts have been widely touted in the past few years.
REITS are generally expected to yield a 10-15% return in 2010 and will benefit from new tax laws that tax Trusts but leave REITS out of it- according to the National Financial Post.
To the typical investor this sounds great- especially if you've gotten burned in the stock market.
But are you investing or really making money? You have to consider management fees and other things that eat away at your bottom line.
Let's go head to head with REits on a simple example- wholesaling:
A Real estate investor controls a property for a small amount of $50. He does no work on the property, and pays no management fees. He goes to his local real estate investor's club and 'assigns' the contract for $3,000 to a rehabber who feels he can make $20k on the deal when it's all said and done.
What's the return on this for the Real estate investor?
You see the difference.
Are you investing or making money?
REITS are generally expected to yield a 10-15% return in 2010 and will benefit from new tax laws that tax Trusts but leave REITS out of it- according to the National Financial Post.
To the typical investor this sounds great- especially if you've gotten burned in the stock market.
But are you investing or really making money? You have to consider management fees and other things that eat away at your bottom line.
Let's go head to head with REits on a simple example- wholesaling:
A Real estate investor controls a property for a small amount of $50. He does no work on the property, and pays no management fees. He goes to his local real estate investor's club and 'assigns' the contract for $3,000 to a rehabber who feels he can make $20k on the deal when it's all said and done.
What's the return on this for the Real estate investor?
You see the difference.
Are you investing or making money?
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