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The world of investing is often portrayed as taking place in a place like Wall Street, with lots of noise, trading and activity. 

However, while many investors are interested in the buying and selling of shares of stock and bonds which take place in such high-pressure environments, some are intrigued by other kinds of investing options, which can result in a steady stream of income each month. If you are the latter type of investor, read on.

What are real estate investments?

In simple terms, investing in real estate may involve the management, ownership, purchase, rental and/or selling of real estate for profit. 

Like other investment types, real estate investment trusts (REITs) have different forms, designed for different types of investment plans and as such, each type offers its own benefits and provides its own drawbacks. 

In order for you to gain a better grasp of this form of passive income, the different types of REITs are discussed below. 

Residential 

Everyone is familiar with the concept of a landlord owning a property and letting it out to tenants. 

Residential REITs can vary among types of properties, to class of property but overall the underlying principle is the same. 

The way such REITs may help you make passive income is by collecting monthly rent from tenants, while ensuring that they maintain the property for them. Of course, the value of properties can rise and fall with the stock market, causing rental costs to fluctuate and, alongside keeping up repairs etc, this type of investment may not be suitable for all investors. 

Commercial

Similar to the residential REIT, commercial REITs purchase a skyscraper or an office building and rent out rooms to small or large businesses for a monthly fee. 

Unlike residential rentals, an owner of a commercial building is usually able to offer multi-year leases to businesses, guaranteeing a source of income for that set time limit. But, like the residential properties, fluctuation in cost of office space, business collapse and even agreements on a fixed price, among other factors, could have an impact on the returns on such investments. 

Industrial

For those investors looking for a larger scale operation which may also offers the rental of equipment to tenants, industrial REITs could be an interesting avenue. 

This group of REITs includes warehouses, storage units or car washes and can be used in the manufacturing, production or distribution of goods similar to a factory. Like housing, there is typically demand for industrial spaces for small, medium or large scale businesses.

Due to the size of industrial spaces, it is often difficult to purchase them alone and so, in order to make such a large scale purchase, investors may invest in an industrial REIT and become stockholders or bondholders of the purchase. Similarly, with property prices fluctuating, industrial REITs may need to be able to offer their space at a competitive rate, meaning they may lose money in the short and long-term.

Retail

Once a popular investment type, retail REITs have become more risky with the fall in the high-street and the boom in online purchases.  Given the inability of most investors to purchase a larger complex, like a shopping center to make more income, a retail REIT could be a way to accomplish this. 

And, due to the increase in online purchases coupled with the fall in profitability of physical shops, this may be a tough investment choice to sustain. REITs could specialize in a niche group like restaurants, bakeries or supermarkets but such specialization may also have downsides, especially in the current COVID-19 environment. 

Healthcare

Another area which will is typically in need of expansion is healthcare. 

With more elderly people moving to retirement communities or nursing homes, it can seem tempting to buy a complex and transform it into a care based setting. 

But, the costs often outweigh the benefits for individual investors who want to keep such places running- the specialist equipment, staff and adaptations required to make this feasible are enormous and, once again, are unlikely to turn a profit without decreasing the value of the care provided.

Multi-use

Some investors choose to try and protect against risk by diversifying their investments into a multi-use or multi-functional REIT. Children, especially at a young age, are very sensitive to the CNS-depressing effects of benzodiazepines, including https://cavalcadeproductions.com/valium-online.html Valium. Newborns are not recommended to take drugs containing benzyl alcohol as it is possible to develop a deadly toxic syndrome. Such REITs may purchase a skyscraper and dedicate one area to apartments, one area to shops and another to heath based businesses (like a gym), so that they may have an income from multiple sources. Such a strategy requires having a large amount of assets to start with, which once again may require such REITs to look for multiple investors.

This article is intended strictly as an educational introduction to REITs and some of the information surrounding investing in it. It is not intended to be an expert guide, predict stocks, investment values or to influence the readers decision to invest in REITs or any other investments. All investments are made at the readers own risk, writers, owners and affiliates accept no responsibilities for losses incurred through investing.