Why Al Hartman Believes Investing in REIT Is Better than Being a Landlord
Al Hartman has kept his eye on what is happening with the real estate market for a long time. If you would like to invest in some new real estate then you could check out Parc Clematis Price which is great value or you could opt for something different. His particular area of focus is Houston, which is now again in a state of flux due to the damage done by Hurricane Harvey. Since the Great Recession of 2008, Houston has been a particular hot bed for real estate investment trusts (REITs). If you would like to invest in to some real estate, then you may want to check out Florence Residences. Essentially, the proposition of a REIT is to pool multiple people’s money together in order to purchase pieces of real estate. The REIT also assigns a property manager, which is usually an external organization. This means, in essence, that people have all the benefits of investing in a property, without the responsibility of being a landlord. For Hartman, this is like having your cake and eating it.
Al Hartman Explains What a REIT Is
A REIT is essentially an investment and management company. There are numerous types of REITs, such as those that focus on commercial real estate, residential properties, apartment complexes, and so on. Just like any other stock, a REIT is traded through high liquidity. Mainly, however, they offer a very interesting investment opportunity.
Spreading the Risk
Because there are so many REITs to choose from, as well as mutual funds that include REIT investments, those who want to take control of their own financial future have a lot of options to choose from. Mainly, it means that those who have no faith in a single investment strategy can diversify in a clever way.
A REIT is a type of equity that is not correlated. Historically, a REIT has provided a consistent 20 year return of 10.57%, which is somewhat above that of the S&P 500. This is why most investors see real estate and REITs as a hedge that protects against stocks and equity. The full gamut of REITs in this country are listed under the FTSE NAREIT All REITs Index. In November 2009, they had a 19.73% return. This was huge, particularly considering the Great Recession was in full swing at that time.
Why REITs Are Better than Purchasing Individual Purchases
So why should you consider investing in a REIT instead of purchasing an investment property outright? The main reason for doing that is that most people simply do not have the funds to purchase an entire property. However, Al Hartman feels that there are other benefits as well. For instance:
- You don’t have to go through photo after photo of properties, hoping that they are accurate.
- You don’t have to take on the full risk of a property should you not be able to find tenants.
- You don’t have to deal with the various issues associated with being a landlord, such as taking out specialized insurance, dealing with repairs, finding and managing tenants, and chasing the rent, or worst case – utilising the services of a law firm like Express Evictions to serve an eviction notice.
By investing in a REIT, you essentially watch your money go through property without having any of the associated difficulties.