Saturday, November 6, 2010

How to Get Monthly Dividend Payments from REITs Investment

As an investor, it is good to have a stream of steady and regular monthly dividend payable to us in our investment portfolio. Perhaps, the first thought that comes to many people’s mind on how to get monthly income from investment is through investing in real estate, the monthly rental payments from tenants can be viewed as a stream of steady income.

Ever think of owing a big shopping mall and a corporate tower, leased and renting them out and get regular monthly income? If you don’t have few hundred millions spare cash in hand, don’t even dream about it! However, we do have another alternative on how to get monthly dividend payments from investment via Real Estate Investment Trusts, REITs.

For as little as $1000, a REITs investor can invest and own a little piece of a commercial real estate and able to collect dividend payment from his investment share. REITs is a trust fund that pools investors’ money to purchase a portfolio of properties. It is managed by a group of real estate professionals whose their job scope is to buy and manage real estate on investors behalf. REITs allow investors to invest in real estate without buying property directly. The properties are then leased and rented out, and almost all of its profits or rental incomes are then distributed to investors as dividends.

If a REITs investor is hoping to get consistent and regular dividend payments from his REITs investment portfolio, then some REITs portfolio structuring work need to be done by diversifying their REITs into holding many types of REITs.

On average, most of the REITs are able to pay 7% to 8% dividend yields. If the overall economy continues to recover with a healthy growth, some REITs may tend to pay higher dividends over the years. The dividend payments timing from different types of REITs are not the same. Some REITs will make dividend payments twice per year while some other REITs will pay dividend payments quarterly. Therefore, investors holding different types of REITs which pay dividends in different months throughout the year can receive a stream of dividend income every year. If an investors can build a REITs investment portfolio which make dividend payments almost every months, and buying equal amount into these REITs, that means the investor can receive consistent dividend payments for almost every month.

Therefore, if you are an investor who seek investment assets that can provide a consistent and regular dividend income, REITs investment can be one of your good alternatives. As mentioned earlier, how to get monthly dividend payments from REITs Investment depend on how you look into constructing a REITs investment portfolio.

In this article, investors need to understand that the above investment concept is solely based on the assumption that the invested REITs will reward investors with the same dividend payments and give dividend payments in the same months in the coming years. If the economy is doing well, some REITs may reward investors with even higher dividend payments.

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