Adding an Upcoming REIT to Your Portfolio

One great way to diversify your portfolio is to include a real estate investment trust. In doing so, you hedge the equity market fluctuations with the real estate market which typically are not highly correlated. If you are not familiar with REITs however, do your research. You need to be sure you understand how they operate before you invest and understand the unique tax implications such as what is return of capital? Also keep in mind that the financial statements cannot be analyzed similarly to our standard companies. The most important piece of information on the income statement is the funds from operation. This is similar to a company's operating income.

One REIT suggestion that Run of the Bull offers is American Residential Properties (ARPI). This recently had its IPO and might experience dramatic upcoming volatility, but its growth potential is armed with low-interest loans and a desperate real estate market. "American Residential Properties, Inc. (ARPI) is a fully integrated and internally managed real estate investment company that is organized as a real estate investment trust. We acquire, renovate, lease and manage single-family properties in select communities nationally. We currently operate in 12 states." As the real estate market continues to gain traction, this company will be right in the heart of the gains.

Watch For: increased funds from operation, possible dividend release.



To learn more about this company visit their website:
http://www.americanresidentialproperties.com/about-us/about-us

In summary, yes, there are ways to capitalize on the up-coming real estate growth without having to pick up a paintbrush or hammer.


-Renner