The Equity or Mortgage REITs Decision - The Differences Explained For Buyers of Del Mar Homes

Knowing the distinction between equity REITs and Mortgage REITs can make all the difference to how successful you will be investing in your Del Mar homes.

Equity REITs actually purchase, hold and manage commercial and rental properties or you we say, they OWN the properties. 

Mortgage REITs do not purchase, own or manage properties; rather they own debt instruments or mortgages on real estate properties. Mortgage REITs have no ownership position on the property.

The amount of risk you are willing to take and knowing your investment goals will help you to determine which of their REITs best suit you. 

The Equity REIT has potential for investment return based on appreciation in value of the properties, inflation that increases rent amounts while mortgages remain consistent, and making profit by short term ownership and sale of the property. 

Mortgage REITs produce significant returns and also carry significant risks to the investor.  Since they have no actual ownership on the invested property, they can not benefit from appreciation of the property.  Their value is also sensitive to changes in interest rates.