The Equilus Group

On Sept. 14, 1960, President Dwight D. Eisenhower signed legislation that created a new approach to income-producing real estate investment — a manner in which the best attributes of real estate and stock-based investment are combined.

These vehicles are called Real Estate Investment Trusts, or REITs (pronounced “REETZ”). Real Estate Investment Trusts give investors of all economic backgrounds access to revenue generating real estate, without owning entire buildings.

The most common model is called an Equity REIT, wherein the investor receives a dividend proportionate to their investment, based on the average return of collected rents, on a portfolio of buildings in which they are vested.

Another common model is called a Mortgage REIT, where the investor’s capital is based on the terms of the mortgage, rather than monies from renters.

Other types of REITs exist, and potential investors should explore all options with their advisor to find what works best for them.

REITs are unique ways to diversify a financial portfolio. Historically, they experience trends and cycles that are different from other indexes and markets. They also allow more transparency than some financial products, such as blind trusts, or Exchange Traded Funds (ETFs).

If you are interested in learning more about REITs, be sure to ask your financial advisor whether they might be right for you and your financial goals. Alternatively, you can find lots of excellent information about REITs through the National Association of REITs at www.reit.com.

Member SEC/SIPC: Equilus Group Inc. is a Registered Investment Advisor of Apex Advisory Group Inc. Insurance Products Provided by Principal Financial.

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