Just like any other investment, learning everything about the REIT you choose is the best way to understand how successful your investment will be. First of all it essential to understand that REITs offer a great avenue to access the real estate market without having to deal with the hassle of managing the property directly. REITs usually attract investors due to the fact that they do not suffer taxation of profits before distribution. The part of REIT income distributed to shareholders is taxed as regular personal income while part of it is not taxed as it is treated as a return on capital invested.
With the above benefits of investing in REITs, it is important as an investor to identify the best outfit which fits your individual expectations. There are different types of REITs as defined by the property market they serve. These can be generally divided into commercial and residential REITs. They are also defined by how they operate judging from their mission statements. Before investing in any real estate investment trust it is important to begin by evaluating their mode of operation and how they ensure all investments are fruitful. In this endeavor, the mission statement is a great source of information.
What We Do
We deal in residential properties and to be exact, single family home rentals. All our investments are aimed at acquiring single family home units, restoring them and then renting them out to residents looking to rent/lease accommodation. All our operations are governed by a comprehensive and detailed mission statement. Under this statement we aim to acquire, restore, lease and manage single-family homes as well-maintained investment properties to generate attractive risk-adjusted returns over the long-term. This is just part of our mission statement and captures our primary area of operation as well as setting the standard for our properties offering.
The single family home rentals market is very different from owning and managing apartment complexes. The niche involves acquiring single homes dispersed over and expansive area. This brings in an aspect of administrative hurdles since it is comparatively more complicated to manage and maintain numerous properties covering a large geographical region as compared to an apartment complex with the same number of units within. This means that the approach to single family home rentals tends to be a bit different compared to other residential REITs. However we have developed a method of operation where we can minimize these expenses and make our business as competitive as other REITs.
All acquisition efforts are focused on comparatively smaller collections of homes located in proximity with one another. This eliminates the hassle of managing scattered units over a wide area. Properties to be managed are scatted in collective units for easy and convenient blanket management. This minimizes management fees as the units do not require more people to manage.
This system is not just good for eliminating common property administration and management hurdles, but also offers the best chance at administering properties that can be easily filled avoiding holding numerous vacant properties. When sourcing the best single family properties to acquire and offer for sale it is best to begin by looking for the value residents would derive from living in a certain area within a city. These factors are varied including access to schools, hospitals, security, as well as transport and communication infrastructure. Acquiring smaller groups of units in close proximity to one another means that you can easily evaluate their value to potential renters and hence use a uniform valuation strategy and even marketing strategy. This is not the case with dispersed units across town.
To offer a risk adjusted return to all investors, it is important to address some of the risks affecting REITs through diversification. By acquiring small batches of single family homes at different locations around a given city, the risk of losing value or all tenants is reduced. Investors should note that the appeal and value of rentals can be affected by the occurrence of localized phenomena which affect the livability of a certain area. Numerous satellite investments work to complement each other and hence spread the risk of reducing rentals.
Our mission statement sets the bar when it comes to our general mode of operation. Interested investors can be able to get a lot of information from the same. The above is a detailed explanation of part of our mission statement referring to important operational guidelines. It demonstrates how we have structured all operational strategies to position the REIT in the best place to claim various operational advantages.
Latest posts by American Housing Income (see all)
- How Does Our Mission Statement Streamline Our Operation? - March 29, 2015
- Balancing Value to Our Investors and Tenants As Well - March 22, 2015
- How We Attain Risk Adjusted Return as a REIT - February 15, 2015