Investing in Real Estate

 

Today many people are looking for ways to reduce the ups and downs of their investments and are asking themselves what options are available that may provide a stream of monthly income and doesn't fluctuate with the stock market.

 

One type of investment is a real estate investment trust.  Often referred to as a REIT, this investment comprised of real estate offers the potential for a stream of income, reduced volatility and the properties may increase in value. 

 

How does a REIT work?

  1. An investor will purchase shares of a REIT.
  2. The REIT will then acquire or purchase properties.
  3. The property tenants pay rent to the REIT.
  4. The REIT will then in turn pay distributions to the investor.

 

Why commercial real estate?

Commercial real estate can serve as an integral part of your portfolio.  The potential benefits include:

  • A relatively consistent stream of income.  REITs are generally structured to provide a relatively steady stream of income generated from the rents of the properties held within the portfolio.  Most REITs distribute income on a monthly or quarterly basis.

 

  • A low correlation to stocks, and bonds.  Real estate has traditionally been less volatile than stocks over the long term.  By investing a portion of your portfolio in real estate, you may be able to reduce the overall volatility of your investments.

 

  • The potential for appreciation.  Real estate has long been considered a solid option for growth-oriented investors with a long-term investment outlook.

 

  • Professional property management.  Real estate professionals conduct the property purchases, maintain the properties and manage the portfolio to be in line with investors' objectives.  Ideally you, the investor, just collect the rental income through regular distributions.

 

  • Potential tax advantages.  1) Avoidance of double taxation - REITs are typically not taxed at the corporate level, which allows for more money to be passed on to you, the investor.  2) Tax-deferred income - A portion of the distribution may not be taxed in the year it is paid to the investor.  Rather, taxation on that specified portion of the distribution is deferred until the original investment is liquidated or sold, at which time it will be taxed at the appropriate capital gains rate.

 

DCP Asset Management, LLC provides REITs in a variety of areas.

  • Commercial Retail
  • Commercial Office
  • Commercial Industrial
  • Healthcare

 

Investing involves risk including possible loss of principal.  There is no guarantee that the investments will perform as expected. Income from real estate investments is not guaranteed and subject to change.  Past performance is no guarantee of future results.

Not FDIC Insured  •  May Lose Value  •  No Bank Guarantee