| For many years, investing in the stock market | | | | mortgages. In both cases, whether from rents |
| was anything but easy. As an investor, you | | | | or mortgage payments, a REIT must annually |
| had to carefully research which stocks to | | | | distribute as dividends to its shareholders |
| buy, decide how much weight to give to the | | | | at least 90% of its taxable income. |
| advice of your broker, then monitor the | | | | |
| ticker carefully to determine whether to | | | | As with mutual funds, REIT shares are liquid; |
| hold, and when it was time to bail out. | | | | shares can be sold at almost any time. And, |
| | | | again like mutual funds, the investment is |
| But the advent of mutual funds provided a | | | | passive - the individual shareholder is only |
| much more hassle-free path to stock market | | | | faced with one decision: which REIT to own. |
| investing for individuals who liked the idea | | | | All other choices are left to the REIT |
| of turning over the decision-making to | | | | administrators. |
| experts. By buying shares in a mutual fund, | | | | |
| the individual investor placed his money in a | | | | On the other hand, a REIT doesn't give an |
| pool, alongside the funds of many other | | | | individual owner any choice in which |
| shareowners, which was then used to purchase | | | | properties or mortgages are purchased - once |
| a large portfolio of securities chosen by | | | | you invest in a REIT, you accept the |
| market professionals. If the fund managers | | | | decisions of others. |
| did their homework well, the value of shares | | | | |
| in the fund would grow nicely; inevitable | | | | A REIT can certainly be a good choice for an |
| losses from some holdings in the portfolio | | | | investor who's looking for a way to get |
| were offset by broad gains elsewhere. And the | | | | involved in real estate while keeping the |
| mutual fund share owner had no day-to-day | | | | complexities to an absolute minimum. At the |
| decisions to make, once he selected the fund | | | | same time, you may also want to look into a |
| that looked right for him. Finally, mutual | | | | land investment vehicle that's as hassle-free |
| fund shares were liquid - the individual | | | | as a REIT, but offers some other features as |
| investor could pull money out of the fund | | | | well. That vehicle is LandBanking. |
| much more easily than a conventional | | | | |
| securities owner. | | | | Unlike REITs, which are primarily income |
| | | | vehicles, LandBanking is aimed at medium to |
| Today, the REIT - Real Estate Investment | | | | longer-term growth. The basic LandBanking |
| Trust - brings the mutual fund idea to the | | | | concept is nothing new - acquire undeveloped |
| field of real estate investing. REITS are | | | | real estate parcels that are located just |
| perfect for Individuals who would like to | | | | outside burgeoning growth centers, hold the |
| position their investment dollars to take | | | | land until local expansion demands make it |
| advantage of real estate's profit potential, | | | | attractive to developers...then sell at a |
| but are wary of the complications of | | | | solid profit. |
| conventional investment choices like rehabs | | | | |
| or new construction, or are too busy to | | | | While you can be your own LandBanker, there |
| acquire the skills needed to navigate the | | | | are also LandBanking partnerships that make |
| real estate mine field. Instead, they can now | | | | investing as hassle-free as REITs. But in |
| buy shares in a REIT and let a team of | | | | this case, your "share" will be an interest |
| professionals navigate the mine field. | | | | in a carefully selected land parcel, chosen |
| | | | by LandBanking experts for its location and |
| Almost all REITs fall into two categories. | | | | imminent appreciation potential. |
| They are either Equity REITs or Mortgage | | | | |
| REITs or a hybrid of the two. Equity REITS | | | | If you don't agree with their analysis, you |
| use their pooled funds to acquire income | | | | can just move on to the next opportunity. But |
| producing properties - residences, office | | | | if you agree, the process is simple and |
| buildings, shopping centers...etc.. Mortgage | | | | straightforward and once you've become a |
| REITs invest in income producing paper, by | | | | LandBanker, you can just sit back and watch |
| providing mortgages directly to property | | | | your land appreciate with no hassles or |
| owners or operators or by purchasing existing | | | | headaches. |