I’ve been told to look into this as a safe investment. But I’m quite bad at understanding anything to do with stocks and trades.
How does it work and how does it make money?
In: Economics
REITs aren’t necessarily safe. They can be pretty volatile, just like the general stock market. An REIT is basically a group of people getting together to combine funds, which are then used to buy property and rent it at a higher price than it cost them to acquire that property. That’s how they make money. You get back a percentage of the profit as a proportion of your contributions (minus an administrative fee). You make money by getting that money back as a dividend or by the value of the stock that you buy rising as they become more profitable or the value of the real property they own increases and people are willing to pay more for that stock.
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