Trust Investing 101

Updated: Jun 29

Trust investing has become a major source of passive income for savvy investors in recent years. Since they were first created in 1960, Real Estate Investment Trusts have been one of the top-performing asset classes in existence.


Real Estate Investment Trusts (REITs) are modeled after mutual funds because they pool the capital of numerous investors. This structure allows ordinary people to capitalize on the real estate market.



Trust investing adds a critical element to an investment portfolio because they can provide a strong, stable dividend every year that has the potential to appreciate significantly over time.


In this article, we're going to discuss:

  • The basics of Real Estate Investment Trusts

  • How trust investing compares to other investment products

  • How much money can you actually make from trust investing

  • Which trust investing platform to choose


Table of Contents

How Trust Investing Works

Equity REITs

Mortgage REITs

Hybrid REITs

How to Invest in REITs

Trust Investing vs. Stocks

Trust Investing vs. Crypto

Profit from Trust Investing

Pros and Cons of Trust Investing

Conclusion


How Trust Investing Works

An REIT is a company that owns, operates, or finances real estate properties that produce income. These properties could include retail stores, shopping malls, condominiums, apartment buildings, office buildings, hotels, hospitals, warehouses, and infrastructure like fiber optic cables, cell phone towers, and oil pipelines.


Individual investors can buy into REITs, and if the real estate managed by the REIT earns a profit, that profit is distributed among the individual investors as dividends.


REITs are publically traded and can be bought and sold like stocks.



There are three basic types of REITs:


Equity REITs

Equity REITs are trusts that own and manage income-producing properties. In most cases, this income is earned through rentals and leases. The bulk of REITs fall into this category.


Mortgage REITs

Mortgage REITs earn money by lending to property owners either through mortgages or loans. They can also earn money through mortgage-backed securities. Mortgage REITs earn money primarily through interest payments on the loans they provide to real estate owners.


Hybrid REITS

Hybrid REITs are exactly what they sound like - a hybrid of the two previous models.



How to Invest in REITs

Investing in an REITs is as easy as signing up! We've made a list of the platforms we recommend, starting with our favorite:



EquityMultiple

EquityMultiple connects accredited individuals with high-quality, expertly screened real estate investments, starting at just $5k, through a streamlined platform.


Although they're one of the more expensive REITs in our lineup, they have a very impressive track record and they only focus on high-value properties.


Of all the REITs on our radar, Equity Multiple seems to be the safest and most lucrative option.



YieldStreet

For direct access to individual commercial real estate investment opportunities, YieldStreet is one of the industry leaders. They also offer managed funds and advisory services for investors who prefer to let the professionals work their magic.


YieldStreet offers multiple investment options, including Funds & Vehicles, Individual Deals, and also includes Tailors Portfolios.