Are Non-Traded REITs Under Suspicion? A Detailed Analysis
Non-traded REITs are a type of investment vehicle that has become popular in recent years. These investments can offer benefits to investors, but they also come with risks. Recently, the SEC began investigating these types of investments for possible violations. To find out more, check Northstar info at InvestmentFraudLawyers.com
They first came into existence back in the 1980s, but they really began to grow popular over the past decade or so. At their most basic level, non-traded REITs are real estate investment vehicles that work much like a closed end mutual fund. They offer investors an opportunity to invest in income property without having to actually purchase and manage it themselves.
Investors buy shares of stock for these types of funds with money from outside sources such as banks or other financial institutions . These investments allow them to earn dividends on their money based upon how well the REIT does financially during its given time period. Like many forms of equity investments , there is always some type risk associated with this form of investing. Investing capital into Non-Traded REITs is a good way for investors to earn passive income.
Unlike other types of equity investments , however, these are often only bought by accredited, wealthier individuals who have financial knowledge and experience with investing . There can be high costs associated with this type of investment that may not make it worthwhile for people without lots of money to invest. There are also additional costs that can come into play when trading or selling shares of Non-Traded REITs .
These types of funds often have strict limitations on the number of times you may sell back your stock to the company. These limits vary greatly, but they typically range between three and five years before investors must hold onto them indefinitely. There is usually at least a one year period in which no early redemption will be allowed prior to these time constraints being imposed. To some extent this reduces risk for investors because it makes it impossible for them to lose money due to an unexpected drop in share price/value if they need their capital sooner than expected due unforeseen circumstances beyond their control.