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Is it worth buying REIT in 2020
April 25, 2020
0
alternative investment

 

Do you want to own a portfolio of real estate to collect rental cash flows? Have someone with expertise manage the real estate and also see your real estate keep up with inflation?

No, we are not talking about buying property upfront to generate these cash flows. There is an alternative solution…

 

What is REIT

 

When it come to real estate investment, it is no longer about just buying and selling properties. It is now becoming more sophisticated with the introduction of REIT. Since 2010, REIT is becoming very popular. Think of REITs as like a combination of stocks and property.

REIT stands for Real Estate Investment Trust. When you invest in REIT, your money is pool together with other investors in a collective investment scheme. This scheme invest in a portfolio of income generating real estate assets such as offices, shopping malls, hotels or serviced apartment.

 

Understand REIT growth

You can invest in REIT the same way you will invest in stocks through your broker. You shall know that these assets are manage professionally with revenues being generate from assets that are normally distribute at regular intervals to REIT holders. It is after accounting for fees such as REIT management fees and property management fees.

Anyone can trade REIT on major exchanges, publicly registered or private.

The Total Return is make up of 1. Dividend Yield  and  2. Capital Growth

 

The types of REIT

 

There are two types of REIT: equity REIT and mortgage REIT

Equity REITs are basically real estate companies who purchase commercial properties and let them out in order to generate income. They acquire, manage, build, renovate and sell income-producing real estate. It is very popular among investors. This type of REIT are suitable for investors who want commercial ram estate action without the need to go out and buy property. They generate rental income by properties they operate.

Mortgage REIT is investing in mortgages, mortgage backed securities and related assets instead of physical properties. Mortgage REITs gain profit by selling mortgages and earning income from the interest on the mortgages they own.

If we are to compare Equity REIT and Mortgage REIT, the former is much more common. Equity REIT account for roughly 90% of the REIT market. Both equity REITs and mortgage REITs may be listed on major stock exchanges. They can also be traded privately.

 

Main reason to buy REIT

 

There are so many types of investment options out there. So why we must consider REIT?

 

Invest in property with small capital

 

If you have limited capital and you like the idea of investing in properties, REIT is for you. These days, you can buy REIT at below $100. In typical property investment, you need to think of downpayment. REIT investment is liquid compare to traditional property investment. You can come out of it at any time.

You can invest without having to ask permission to anyone. There is no need to get a loan at the bank to invest in a REIT.

 

Easily diversify your portfolio

 

As REIT is quite cheap to invest, you can easily diversify portfolio. It is good to balance your portfolio across different regions. You are not limited to residential investments or small investments when you are investing through REITs. The gap to understand REIT is smaller compare to other general market investing.

If you are starting out in the field of property investment, you aren’t going to buy a 10 apartments building as your first investment. As normally you don’t have the capital, you will usually focus on smaller investments like condos or small houses.

 

Your investment is hands off

 

It is a “clean” investment compare to traditional property investment. No need to fix toilet or other facilities like a normal property. Everything is left for the REIT company to handle. It is a hands off approach to this type of real estate investment.

The only thing you have to do is to select the right REITs for your portfolio, receive your dividends, and reinvest your earnings if you want to. It is easier and hassle free.

 

It provide great returns

 

You can achieve great returns in REIT. Many people can get yield of around 5% annually. It is only slightly smaller than traditional property investment. This is definitely worth considering as REITs is a small price to pay compared to all the hassle that comes with owning and managing your own property.

You can get your dividends from REIT as fast as quarterly per year. It may not be like traditional property investment which can get yield  every month but it does not fare too badly.

 

The risk for Equity REIT and Mortgage REIT

 

As like other forms of investment, REIT has it’s own risk as well. We shall take a look on possible risk if you buy these REITs:

  • Equity REITs more incline to be cyclical in nature and can be sensitive to recessions and periods of economic decline.
  • On equity REITs, if there is too much supply- Example, more hotel rooms than a market can support, it can lead to higher vacancies and lower rental income.
  • The changes in interest rates can impact earnings for mortgage REITs. Similarly, lower interest rates may lead more borrowers to refinance or repay their mortgages and the REIT has to reinvest at a lower rate disappointingly.
  • Most of mortgage securities that REITs buy are backed by the federal government, which limits the credit risk. However, certain mREITs can be exposed to higher credit risk. It all depends on the specific investments.

 

How we qualify REITs

 

REITs need to comply with certain Internal Revenue Code (IRC) provisions. So for a company to qualify as a REIT:

  • Invest in at least 75% of total assets in cash, real estate or U.S. Treasuries
  • Must earn at least 75% of gross income from rents and interest on mortgages that finance real property or in real estate sales
  • Minimum of 90% of taxable income payment in the form of shareholder dividends per year
  • Become an entity that is taxable as a corporation
  • Minimum 100 shareholders after the first year of existence
  • Must be managed by a board of directors or trustees
  • Must not have no more than 50% of its shares held by five or fewer individuals

A corporate can avoid corporate income tax by having REIT status. A REIT will distribute all or almost all of its profits and gets to skip the taxation

 

How to start on REIT

 

So you know a little background on REIT, how you start on REIT now?

There are some guidelines that can save you the time to start it (though not limited to these):

  1. Know the Code/Symbol of the REIT
  2. What is the current price and historical price
  3. The historical dividend per unit per year
  4. Start calculate the annual dividend yield
  5. Some resources that you can view dividend yield at a glance
  6. Official Company Reports – Quarterly FS and Annual Reports (including the older ones), Rights issues, placements, general announcements
  7. Third Party Reports – brokerage reports

 

Conclusion

 

REIT is easier to understand for beginner investors. Equity and mortgage REITs are required to pay out 90% of income to shareholders in the form of dividend. The good thing is, they are often higher than those of stocks.

Equity REITs may be attractive to buy-and-hold investors looking for a combination of growth and income. On the other hand, Mortgage REITs may be better suited for risk-tolerant investors looking for maximum income without much focus on capital appreciation. Whether it is worth to buy REIT depends on your level of risk you can take and your understanding of real estate fundamentals.

 

Equity REITs hold large amount of Real Estate. Large Real Estate Holdings make eREITs especially resilient to bankruptcies.If you have  high-yield portfolio, REITs are an obvious source of high, recurring and stable dividends.

Base on Google Trends, google search interest on REIT in the United States reach all time high in 2019:

How interest increases in united states

Interest in REIT is climbing vigorously in 2019 and peaked in March 2020 before losing steam. It is in downward trend for interest after March 2020.

Similarly, i take a look at the chart for some REIT companies:

REIT in united states

It is climbing fast since beginning of 2019 before fizzle out around end of the year. This explain the interest surge in REIT soon after 2019. But is it too late to buy REIT now?

It is still not too late as REIT is not too saturated yet. You can still invest in it with research and due diligence.

Get to know how to find value in REITs in here

To find out more on other investment types, go here

Understand passive income and it’s options
April 19, 2020
0
other income source

How much you know about passive income?

“Study hard, go to a good university. Get Masters or PhD, land yourself a good job. Go and work for an MNC and climb the corporate ladder. Vote for trump. Invest in stocks and shares just like all my friends do.”

Sounds familiar? The above must be the most frequently spoken in everyone mouth. Schools teaches that and probably your next door neighbour tells you these too. But is a successful life just circled in this? Well, it is not wrong to do these. But if you are ambitious or wants to be very rich, you need an unconventional way.

There are 3 types of income namely active income, passive income and portfolio income. passive income is a regularly earned money with little or no effort on the part of person receiving it. You just need to build the foundation for each income stream.

 

passive income sources

 

Passive incomes types

 

My friends, it is now a growing trend that one should be building assets to be richer. Assets that brings in money. Best if it is some form of passive incomes that brings in money even while you sleep. Building these enables you to grow your wealth exponentially. Passive incomes still rules even after many years. let us explore the various types of passive incomes.

 

Stocks and Shares

 

There is nothing wrong to buy stocks and shares. However, lots of research is needed to buy it as passive income. Returns are generally not a lot unless you are sharp eye to notice the high potential ones. You will need a significant amount of money to invest in these and no guarantee of good returns.

Dividend stocks is one of the most popular. If you consistently invest the money into it, you can amass a nice residual income over time.

 

Invest in REITs

 

Investing directly in real estate need a high capital. Maybe you’re not yet an accredited investor. It is okay. You can still fulfil the advantage of real estate in your investments through REITs – Real Estate Investment Trusts.

These are investment vehicles that hold property within them which you as the owner get to benefit from the gains, sales, refinances, income (or loss) on the property.

 

Buy bitcoin and other cryptocurrencies

 

Bitcoin and other cryptocurrencies as digital asset are becoming extremely popular nowadays. Many people buy it as a store of value over the years. It is recommended to have 10% of your total portfolio on bitcoins. It is a good alternative investment considering that there are only 21 million bitcoins in the world.

Known also as “the peoples money”, the big draw is that bitcoin is run on blockchain. All transaction on blockchain is transparent which is favoured by many people. Being a new type of asset, there is so much room for it to grow. However, extensive research is needed due to rampant scams around the cryptocurrency realm.

It is recommended to buy these cryptocurrencies from reputable sources. Holding it for at least 5 years can possibly see great results.

 

Rent out a room in your house

 

If you have available rooms, why not just rent out the spare rooms in Airbnb? Or at Flipkey? These rooms can bring in the cash without you doing anything. Well, perhaps only to ensure these rooms are well maintain.

If you’re on vacation or out of town, renting out your whole place on Airbnb also sounds good. It can be strange leaving your space in the hands of strangers. However, Airbnb has up to one million dollars of insurance in case something goes wrong. There is a rating system too. You can review the reputation of the renter before letting them rent your place.

This has to be the easiest for making passive income. There isn’t any criteria to rent your room out. There is also no skill involve. You can get to interact with your tenants.

Best is, you get to choose the daily rate for them. Location, size and how nice you decorate your room will influence people’s decision. So you are like the boss here!

 

Create and sell an online course.

 

This got to be a real chance to create passive income. Do you have a unique skills that you wish to share with people? You can earn money from these. Just need to take a look on the different platform online. There is YouTube where so many people are gaining subscribers for their channels. There are also LinkedIn learning, Consera and Udemy.

Sign up for those and upload your course videos. You will be earning money even while you sleep. You will continue to get paid while people watch your created course videos. People don’t just learn at colleges or universities. Learning no longer confine within 4 walls of your school. It is predict that online course industry will expand exponentially within the next 10 years.

 

Affiliate marketing

 

Well, this isn’t new. But still very applicable in today internet obsessed people who spend many hours online. If you have a website that draws many visitors each day, you can seriously consider this. All you need to do is to sign up on the suitable affiliate programs out there. Choose those that are reliable in payouts and high commission per click. Integrate them into your website.

Then bingo! You will start seeing your account starts to load with money. This isn’t a dream. It is a reality if you act now.

Check out some great list of affiliate programs that may interest you. Forex referral, Tech radar and many more.

 

Sell stocks photos.

 

If you are a photographer, this is a very attractive source of income. You can capture these photos to sell them on websites. All you need is to upload them into the stock photo database. Interested parties will purchase your stock photo and automatically you get paid. Isn’t this wonderful?

Stock photography is simply a term use for imagery that buyers use for the visual content in everything from news stories, blogs and websites. It can be for design materials use in ads or promotional materials. It can be competitive in this type of passive income. You generally should have above average images that are relevant for use in the commercial world.

If you have what it takes to be successful in this line, you should try it. Getty images

 

Create a mobile app

 

This got to be one of the most insanely profitable income if do it right. With almost everyone owns a mobile phone today and everyone tuning in to apps, what better ways to start earning money create these mobile apps to attracted thousands or even millions of people.

The mobile app industry is expected to top $200 billion in 2020 alone with projection to soar beyond this number. Past success stories including creator of Angry Bird gaming and Pokemon Go.

There are many successful stories of people who create gaming apps to launch them. Some even become billionaires just having apps that are one of the most downloads on apple store. You can also create apps of different types like fitness, lifestyle, cooking to self-learning etc.

Don’t have the skills to create apps? fret not. You can always go to platforms like UpWork, Freelancer and several others to help create app of your idea at bargain costs

 

Buy and sell domain names

 

Domain name is a website name. Think about facebook.com. This is a domain name. Domain name is no longer just a simple name purchase with just $5 or $10 that we know about 20 years ago. It has evolved to a industry of it’s own. Businesses in the world is always growing. Good names are harder and harder to get, many have start to purchase good domain names and then sell them at higher price to earn a profit.

Do you know facebook had purchase the name fb.com for 6 million dollars? Well, it can be lucrative business if you know where to buy value-for-money names to sell them at higher price. There are lots of competition in this trade. You will need sufficient research if want to excel. It is no longer just the .com, there are .org/ .net/ .io/ .ai/ .app and many more.

Several platforms allow you to do that- Sedo, Flippa and Go Daddy just to name a few.

 

Design built to print T-shirt

 

If you enjoy design and has a flair for artistic things, this one is for you. There are several built to print online companies to store your T-shirt design. Creating it is not difficult if you use photoshop. Similar concept as stock photos, these company keep stock of your design in their huge database as if anyone buy your design, you will earn a commission.

It is not difficult to design as long as you have the creativity.  Redbubble is one such platform that you can use to sell your T-shirt design.

 

E-commerce

 

You can create an e-commerce site to sell things. You will need to find trendy products from wholesaler. But these days, there are many online wholesaler that you can engage with. Think of Alibaba, where you can find manufacturers and exporters of products easily in China.

If you do not want to buy in bulk due to higher risk, you can use the drop shipping model. For each item sold, product from manufacturer will ship to customer directly. It means there isn’t a need to hold inventory, greatly reduce risk and capital. From there, you use sites like Aliexpress, which is affiliate to alibaba. Another site is Spocket, which is also highly popular

So this can be a passive income by make your site automated. This way, any buyer request can be process automatically with automated transaction. it saves you the time to earn money.

 

Conclusion

 

There are always different types of passive income as time progress. Check out more on the main page for more ideas!

Buy investment property without credit check
April 2, 2020
0
blank

To buy investment property, how do you go about it. Can you actually buy investment property without credit check?

Low down payments, no credit check and guarantee approval. This is the convenience for many investment property buyers who choose to shop online. The internet being responsible for dramatically changing the way people do business. It is thus also responsible for revolutionize the way people shop for investment property.

 

Undertstand buying investment property process

 

A conventional loan for investment property would entail an application, credit review and complete disclosure of the applicants financial situation. However, an increasing number of real estate developers, owners and brokers are offering investment property. That is with the convenience of owner financing.

A low down payment, which is followed by regular monthly payments, may result in a prime piece of investment property. Most commonly use for purchases of land. The owner financing is extremely popular for investors, first-time home builders with no credit. Or even individuals who have past credit problems and would not otherwise qualify for a conventional loan.

 

learn more about property investment

 

With very low down payments, which are often lower than $1,000.00, many investment property sellers provide competitive interest rates. They also have low monthly payments with absolutely no qualifying, credit check or income verification. As long as consumers continue to make their minimum required monthly payment, they will be approved.

No matter when, where or how investment property is purchase, the buyer must perform due diligence prior to signing on the dotted line. The buyer will want to make sure that he/she will receive a warranty deed on any investment property. This means it will be free and clear of any liens, and that the current owner has the full right to sell the property.

In addition, it may be a good idea for the potential buyer to contact the local tax office and inquire about the most recent assessment of the investment property. This will give the buyer a good idea as to whether or not he/she is getting a bargain.

If the investment property is located in another state, the buyer should request photos and even consider hiring a video professional to make a recording of the immediate area and the land for visual purposes.

 

Importance of the contract

 

When agreeing to purchase investment property with owner financing, a signed contract is a must. This is simply a contract that is drawn and signed by both parties, which will indicate the down payment required, full purchase price, monthly payments, number of payments required until payoff. Also, listing of pre-payment penalties (if applicable), the location of the investment property and the size and details of the same.

A valid investment property contract will confirm that the seller agrees to finance the property at a certain amount of interest and will sell the described property after a predetermine number of payments. In return, the buyer agrees to pay a certain amount each month on a specified day each month. The contract shall outline the exact location, street address, size of the lot and parcel number.

In addition, it must include terms regarding late or missed payments, late fees and cancellation options (if any). The contract must sign and date by both parties in order for it to be valid.

Understand more about investment property here.

Also for more information on others like bitcoin as investment here.

Find stock market industry & research stock trade
April 2, 2020
0
shares

I know stock market is first you think of when comes to investment.

Lets talk about Stock Market. Stock Market Industry Beta is the measure of how a stock ís trading. Price moves compared to the market as a whole. Knowing this figure one can understand how volatile a stock is. A beta of 1 means a stockís price fluctuates exactly as much as the market. A beta less than 1 means a stock is less volatile than the market and a beta greater than 1 means that stock is more volatile than the market.

Betas can be determined for entire industries also. The ìindustry betaî would compare the volatility of the industry relative to the whole market. For example, technology stocks tend to be more volatile than the industry so generally, the beta would be more than 1.

To calculate industry beta you need some historical data of the price of the industry stock and historical price data of the entire market. For example if you were going to calculate beta over the last year for compare technology stocks versus the S&P 500, you would need to first gather the historical data you need. Next, determine the movements of the two prices after each trading day. This will give a percentage change versus the previous day.

Once we have 365 of these we can average the group to determine the average move each made over the last year. We can call the average industry movement Ri and the average market movement Rm. Finally, divide the technology industryís average movement by the S&Pís average movement and we will have an outcome that is less than 1 (less volatile), 1 (equally volatile), or greater than 1 (more volatile). Written out this function looks like this:

= Ri / Rm or B = Covariance(Ri , Rm)/ Variance(Rm)

Beta can be useful in stock research when judging how risky a stock is versus a stable investment with a guaranteed rate of return. It must be noted that the longer period of time the beta is acquired the more accurate that beta will be. Also, betas are more valuable when used with stocks that have a long record of high volume trading. Smaller stocks that donít trade a lot can fluctuate wildly on a busy day and throw the beta out of whack for the period being measured.

 

stock and shares

 

Research Stock trade before Investing

 

Once you determine which business cycle the economy is currently in you can start researching for a trade. It is best to have some sort of a system in place that will be used before EACH trade. Here is a simple 5 Step formula to help get you started. They are a follow.

5 Steps to Investing Online:

 

1. Find a stock
This is the most obvious and most difficult step in stock trading. With well over 10,000 stocks to trade a good rule of thumb to consider is time of the year. For example, as I write this, it is the beginning of spring. It would make sense to consider stocks that traditionally make runs, or slide if you are bearish, during this time of year.

2. Fundamental Analysis
Many short term traders may disagree with the need to do ANY Fundamental Analysis, however knowing the chart patterns from the past and the news regarding the stock is relevant. An example would be earnings season. If you are planning
on playing a stock to the upside that has missed its earnings target the last 3 quarters, caution could be in order.

3. Technical Analysis
This is the part where indicators come in. Stochastics, the MACD, volume, moving averages, RSI, CCI, support levels, resistance levels and all the rest. The batch of indicators you choose, whether lagging or leading, may depend on where you get your education.

Keep it simple when first starting out, using too many indicators in the beginning is a ticket to the land of big losses. Get very comfortable using one or two indicators first. Learn their intricacies and you’ll be sure to make better trades.

4. Follow your picks
Once you have placed a few stock trades you should be managing them properly. If the trade is meant to be a short term trade watch it closely for your exit signal. For swing trade, watch for the indicators that tell you the trend is shifting. Lastly, for a long term trade remember to set weekly or monthly checkups on the stock.

Use this time to keep abreast of the news, determine your price targets, set stop losses, and keep an eye on other stocks that you may want to own as well.

5. The big picture
As the saying goes, all ships rise and fall with the tide. Knowing which sectors are heating up stacks the chips in your favor.
For example, if you are long (expecting price to go up) on an oil stock and most of the oil sector is rising then more likely than not you are on the right side of the trade. Several trading platforms will give you access to sector-wide information so that you can get the education you need.

 

Other ways to increase your profits

 

So imagine what you could learn from over 500 articles based around internet marketing, business and finance, home business, legal matter, blogging, copywriting, email marketing, PPC, RSS, search engines, website promotion and more and what could this do for your business?

1. How to Turn an Idea into $100,000

Do you ever wonder why some people seem to get all the lucky breaks in business while others struggle to barely get by? They seem to be in the right place at the right time.

The fact is, maybe theyíre not at the right place at the right time; maybe they just know how to make things ìhappen.î

As a business advisor I often see people begin and end a business before they have given it a chance to grow. For some reason, they seem to think that all they have to do is have a product or service to sell and the rest magically takes care of itself.

Nothing could be further from the truth. For any business to succeed there are steps that must be taken.

2. The Steps from Product Idea to Product Success

Michelangelo once said that his statue of David was embedded in the block of marble and he merely chipped away the edges to reveal it. Is your product idea inside your mind just waiting to come alive? Or, is your product already formed and you need only to smooth out the edges?

Using my Market-Step process your idea will come to life as we progress in the following steps from idea to launch:

1. Self-Evaluation
2. Concept Evaluation
3. Prototype Evaluation
4. Product and Market Planning
5. Product Development and Marketing Tactics
6. Product Launch, Marketing and Selling

Please use this roadmap as a navigational tool to guide and monitor your progress.

3. Is This the PR You Thought You Were Getting?

You know, where you do something positive about the behaviors of those outside audiences that MOST affect your organization? And where you do so by persuading those important external folks to your way of thinking, then move them to take actions that help your department, division or subsidiary succeed?

Yes, thatís right, itís where you use the fundamental premise of public relations to produce external stakeholder behavior change ñ the kind that leads directly to achieving your managerial objectives.

What it boils down to is:

(1) your public relations effort must involve more than special events, brochures and news releases if you really want to get your moneyís worth, and
(2), the right PR really CAN alter individual perception and lead to changed behaviors that help you succeed!

4. How to Easily Increase Your Profits

Do you remember the last time you went into a shop and the person ëservingí raced over to you, greeted you with a lovely smile, heaps of enthusiasm and said, ìWelcome to our store, what can I help you with today?î And then listened attentively to what you had to say?

Doesnít happen very often does it? In fact, while I was writing this, I couldnít recall when I had experienced it. Iím sure I must have yet it would have been so long ago, I canít remember.

Let me tell you what happened this week:
I belong to a well-known trade exchange which I have found very useful for my business. I wanted to purchase a suitcase from a particular store which usually takes trade dollars.

From time-time the store will limit the use of trade dollars if they have reached their maximum for the month. Anyhow I quickly discovered this wasnít going to be my lucky day.

5. A Simple Formula for Success

Leaders in the business world need public relations big time, and they show it every day.

How? By staying in touch with their most important external audiences and by carefully monitoring their perceptions about the company, audience member feelings about hot topics at issue, and the behaviors that inevitably follow.

Could there be an angle here for your business?

What I mean is, once you interact with, then learn what that key target audience of yours believes about you and your organization, a corrective public relations goal ñ a specific behavior change — can be established.

Which then requires that you identify a strategy. There are just three choices here, create opinion where none exists, change existing opinion, or reinforce it.

6. Attracting Clients With Ease

Whether you are already running your own business, or still thinking about starting your own business, I suspect that deep down you know you have gifts and talents that can really make a difference to others.

In an ideal world, you’d spend the majority of time doing the work you love to do, with a steady stream of clients knocking at your door as and when you want them. The reality, however, can be somewhat different, and the whole process of finding new business can be a time consuming challenge full of uncertainty.

Some would be entrepreneurs are so intimidated by the idea of finding clients that they never put their dreams into action. Others start promising businesses, yet give up disillusioned by the frustrating lack of clients.

Some die-hards persist, but at great emotional and financial cost as the uncertainty about attracting and maintaining clients takes its toll.

For beginners guide to stock market investment, you may refer here.

More on other investment, refer here.