The real investment trust or the REIT exposes you to the various commercial real estate investments without actually buying the commercial real estate. These trusts are mainly specializing in commercial properties. These trusts work like mutual funds where the investor contribute funds to the overall central pool for buying commercial property. Commercial real estate REIT helps in giving investors exposure to the commercial property investments without the need to buy the properties outright.
The commercial property REIT refers to properties mainly used for any business purpose like hotels, stores and offices. They trade shares on the public exchange market, and the investors will become shareholders by purchasing those shares of that particular property. On the contrary to the residential properties, REITs, the commercial trusts are mainly liked by the investors looking for high returns on hands-off investments.
How can you invest in Commercial real estate REITs?
Commercial Real Estate is divided into multifamily,office, medical, storage,industrial, etc. Commercial properties can offer workspace for doing business, including office spaces, hotels, convenience stores, manufacturing units and so on. Contrary to residential houses, commercial properties are considered the best investment as they have higher passive income.
An investor who invests in commercial properties can choose how to make the investments either by direct ownership of the real estate or indirectly by investing in the ownership shares of the trusts in a REIT.
Direct investment through REITs
Direct investment means supplying considerable capital for financing a new building and or acquiring an existing commercial building. Sometimes commercial properties are at high risk but also offers a high return on investment. This means that investors investing directly in these properties should possess good knowledge about the commercial real estate industry and a large amount of capital.
Direct investments are best for the high net worth individuals and institutional investors.
Indirect Investing in The Commercial Properties
Indirect investment is one of the most popular processes for investing in commercial properties without spending too much capital or getting involved with the property. The investors can now own the commercial real estate by buying the shares from a REIT, which mainly specializes in commercial real estate.
The REITs buys commercial real estate, and the investors then buy the shares in a similar way they buy stocks and bonds. This indicates that the investors also own the properties without taking mortgages, as a direct investment.
Some of the top commercial properties include offices, multifamily apartments, hotels, industrial buildings and retail stores. Suppose you want to invest in commercial properties through a REIT. In that case, you can get help from Wealth BCI, one of the leading organizations that help investors find out about commercial properties and assist them in investing in these properties through REITs and syndication.