High Yield Real Estate Investments: Are They Right For You?

Are high yield real estate investments right for you to include in an investment portfolio? To answer the question, the prospective investor must consider the type of real estate investment and the possible risks.

holding house representing home ownership

Real estate investments are trusts that purchase and improve properties for the sole purpose of investing. Examples of properties and similar assets are apartments, buildings, mortgages, resorts, and shopping malls. There are ways to determine if a real estate investment is right for you.

Determine if the Broker or Financial Advisor is Registered

Before you select a real estate investment, ensure the broker or financial advisor is registered with Security Exchange Commission (SEC). Brokers and financial advisors should provide the prospective investor with information concerning real estate investments and the risks involved. If the issuer is not registered with SEC, there is a possibility the broker or financial advisor are running scams.

Types of Real Estate Investments

There are two types of real estate investments, public-traded and non-exchange traded. The difference between the two is public-traded investments are traded publicly and non-exchange investments are not traded publicly.

Public-Traded Real Estate Investment Risks

Most investments options come with risks, including public-traded real estate. There are two possible risks involved with public-traded real estate investments. The first risk is when the interest rate is high. According to some economists, public-traded real estate investments don’t perform to its potential when interest rates are increased. Another risk is selecting the wrong real estate investment.

Non-Exchange Real Estate Investment Risk

The biggest risk of non-exchange real estate investment is deficiency of liquidity. When there is a deficiency of liquidity the investor cannot sell shares. Other risks are inability to determine the value of a share and to monitor the value.

Ways to Purchase and Sell Real Estate Investments

Prospective investors can find a list of publicly traded real estate investments on a stock exchange. Shares can be purchased through a licensed broker or financial advisor. If you have an interest in non-exchange investments, select a reputable broker who specializes in non-exchange real estate investment options. There are several options of publicly traded real estate investments, such as, preferred stock, debt security and common stock. The Jakob Pek Fund is an example of a real estate investment company that manages invested capital for limited partnerships and mortgages.

Both non-exchange and public-traded real estate investments offer high returns on invested capital. You can determine if a real estate investment is right for you by performing research on both options before initially investing. The downside of non-exchange options is prospective investors are unable to do research until the offer closes. If the broker or financial advisor is registered with SEC, you are probably selecting the right high yield real estate investment.


About the author: Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information on high yield real estate investments, talk to the Jakob Pek Fund, a leading real estate investment company that manages invested capital for limited partnerships and mortgages.

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