Real Estate Investing

Real estate investment trust (REIT) ETFs are exchange-traded funds (ETFs) that invest the majority of their assets in equity REIT securities and related derivatives. REIT ETFs are passively managed around an index of publicly-traded real estate owners.

A triple net lease (NNN) is a type of commercial lease in which the tenant promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance in addition to the rent and other expenses. Many investors view triple net leases as attractive investment vehicles because they provide low-risk, steady income.

The capitalization rate is the expected rate of return an investor can expect to receive from owning and operating a piece of commercial real estate. The capitalized or “cap” rate is calculated by dividing the net operating income by property asset value and is expressed as a percentage.

Investment real estate is a piece of real estate that generates income or is otherwise intended for investment purposes that is not used as a primary residence. Investment property can be commercial or residential and holds different tax implications than residential real estate.

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. REIT portfolios typically include a wide variety of commercial, residential, and industrial real estate projects. The three types of REITs are equity REITs, which own and manage income-producing real estate, mortgage REITs, which lend money to real estate owners and operators, and hybrid REITs, which combine the investment strategies of equity and mortgage REITs.

Real estate wholesaling is a business venture in which the wholesaler acts like an intermediary, selling the property on behalf of the property owner and keeping the profit. The wholesaler doesn’t actually purchase the property, instead, they are afforded the right to sell the property on behalf of the owner for an amount of time determined by the contract.

A real estate investment group (REIG) buys, renovates, sells, or finances properties, then allows investors to join the group by purchasing them. REIGs provide direct investments in real estate projects, without all the property management responsibilities. Unlike real estate investment trusts (REITs), REIGs are not subject to any specific limitations or disclosures.