For example, it does not require you to deal with management hassles. Again, you do not need to spend time for the various formalities involved in a direct property ownership. It is in fact an indirect real estate investment, and it can effectively produce high yields and substantial capital appreciation for you. If you are considering investing in real estate securities, you must have proper knowledge regarding the different types of real estate securities and their profit potentiality.



Real Estate Investment Trusts

If you are looking for ways to capture high yields and huge capital appreciations by real estate investing in securities, real estate investment trusts make an excellent choice. Commonly known as REITs, real estate investment trusts are the organized companies that are regulated by law. The biggest advantage of investing in these types of securities is that they pay more than ninety percent of their total income as dividends to their shareholders. Thus, being a shareholder, you can also make hay while the sun shines. What is more, when you invest in these securities, you are taxed only once. Thus, professional management, high yields, long term capital appreciations, tax benefits and so on, these are just a few names among the intimidating array of advantages it offers. REITs are in fact high yield vehicles that also offer a chance for capital appreciation. You can expect dividend yields in the 5-8 % range.

Real Estate Mutual Funds

When it comes to real estate investing in securities, mutual funds are one of the best options to go for. Some of the important features of these types of securities include high yield, long-term capital appreciation, professional management and diversification etc. However, the only bad part is that since they are associated with real estate investment trusts, you need to pay double management fee and other expenses first, to the trust management and second, to the mutual fund manager. Still, the expenses are relatively negligible in comparison to the high yield and the other advantages they offer.

Private Mortgage Loans

Private mortgages are another high yield securities. They are fully associated with income producing real estate, and you can use them for the acquisition, rehabilitation or equity cash out of residential and commercial real estate investing properties. This way, in the first trust deed positions, you can obtain return, as much as twelve to fourteen percent, and in second trust deed positions, the return can be even fifteen to eighteen percent. Besides, there is an array of other advantages as well. For example, where normally it should require 10 weeks or more, it takes not more than three weeks for the closings of most loans. Investors in private mortgage notes are able to receive much higher yields with no increased risk. These loans usually last for the duration of one year and provide a monthly income with interest only payments.

Overall, if you have a full time job or business, or if you are just retired looking for greater income than bank CDs and greater security than a volatile stock market, or if after having owned income-producing property for many years, if you are tired of dealing with tenants, real estate investing in securities is a great alternative for you.