Investing in Reits for passive income

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  1. Stacie L profile image91
    Stacie Lposted 7 years ago

    I've read the hubs on REITs but would like more up to date information on getting dividends on mREITS.
    I have friends who are trying to convince me to invest in these.
    i don't have a lot to invest now so anyone want to chime in on their experiences.

    1. dpsimswm profile image59
      dpsimswmposted 7 years agoin reply to this

      Stay away from MREITS.  They make those huge dividend payments by investing in mortgage bonds and borrowing at short term rates.   Rates are only going to go up.

  2. Hypersapien profile image45
    Hypersapienposted 7 years ago

    I own a couple of REITs, but to be frank I don't follow them too closely.  I know the stock price is down on one since I bought it, but I primarily got into it for the dividend  - it's paying about 15% - so I'm not overly concerned.

    To be frank, they can be good for dividends, but real estate can be choppy.  If you're risk averse, you might want to try one of the Dividend Aristocrats, which is a list of well-known companies that have increased their dividends annually for at least 25 years - e.g., Johnson & Johnson, Wal Mart, etc.  (I actually have a hub on dividend investing.)

    The dividend probably won't be as high as with a REIT, but you're getting a rock-solid company with a long history of dividend growth.  Moreover, ordinary people can get rich with these kinds of stocks.  Anne Scheiber was a woman who never made more than $3500 when she worked, and she invested her entire life savings of $5000 in dividend stocks when she retired.  She never sold, and when she died her portfolio was worth $22 million.  (I also have a hub on ordinary people who invested and got rich.)  The point is that anybody can do it, if they have a little bit of discipline.

  3. Max Dalton profile image87
    Max Daltonposted 7 years ago

    Hi Stacie L,

    I'm just an average investor who decided to manage my own investments, and all I have to add to the conversation is: it's nice that other people want to give you advice, but use that as a starting point for your research. Just because someone says REITs are a good investment and will do well over time, you may never feel comfortable with your investment because you don't really understand it. If you do the research and ultimately invest in something you feel comfortable in, you'll sleep a lot better at night and you won't be shocked when the stock goes way up or way down because you'll have a better understanding of the fundamentals. Also, try to avoid throwing all of your eggs in one basket. If you throw all of your money in one REIT and it goes bad, you're gonna lose big, panic and probably sell, and if you throw your money into a few REITs and the whole sector goes bad, you're probably gonna lose big, panic and probably sell. And if you find you can't sleep at night because you're worried about your investments, handling your own investments probably isn't for you.

    Max.

  4. T. R. Brown profile image76
    T. R. Brownposted 7 years ago

    Stacie,

    Although REITs can be a good investment, they are certainly not without risk (no investment is).  As such, I would HIGHLY recommend that you play it very conservative over the short term and begin to build you knowledge base on all investment types.  Further, you should seriously consider your future goals in determining how you would like to invest you money for your future.  Don't jump into anything based on what your friends suggest.  Find some very conservative investments and park you money there while you learn.  Then take educated decision based on your future and risk tolerance, not the advice of friends.

    Best of luck

  5. CJ Andrews profile image91
    CJ Andrewsposted 7 years ago

    They can be quite risky.  I do some with ARR, but it pays a monthly dividend.  I would have to say if you are uncomfortable - do not do it.  There are times when pushing the boundaries of your comfort is good.  But if you do not have the money to lose; then do not lose it.

    1. Ramsa1 profile image62
      Ramsa1posted 7 years agoin reply to this

      I agree with your comments CJ. I invest in individual stocks and have been doing well with them. I don't like REITS because I am doing very well with stocks, earning dividends and capital gains. I would say that one should only invest in something one understands and is comfortable with.

  6. iamageniuster profile image74
    iamageniusterposted 7 years ago

    I would definitely start investing in REITs. They give good dividends and will provide a good 2nd source of income passively.

    1. CJ Andrews profile image91
      CJ Andrewsposted 7 years agoin reply to this

      It matters to person to me.  Overall, I invest a lot into monthly dividends - some of those are REITs and some aren't.  But if a person doesn't know about them and isn't sure what they want from investing - they need to learn some stuff before throwing money around with no intent. 
      And if you don't know about it, don't do it - learn about it first or invest with someone you trust.

  7. jcales profile image59
    jcalesposted 7 years ago

    what are MREITs?  mortgage investment reits like annaly capital?

    I got one a few yrs ago that incests in college campus towns and is 300% up.

    College town multi-family units are not bad investments in a down economy.

    1. CJ Andrews profile image91
      CJ Andrewsposted 7 years agoin reply to this

      Anything with rent in a bad econ is a good idea.  I would hit large cities or agriculture areas probably.

 
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