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REITs, mutual funds offer similar benefits

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not require so much equity capital."

The strategy is rather simple, according to commercial Realtors. Investments are pooled into a central fund, which then goes toward the purchase of one or more properties otherwise out of reach of a single investor. The real estate is managed by the broker or designated agent, with eventual returns divided among shareholders.

Such an approach can offer a number of benefits to participants. Much like a stock portfolio or mutual fund pool, the real estate investor turns over much of the responsibility of managing the asset to another party, freeing the investor from many of the worries associated with direct property ownership.

"That is the beauty of an REIT that you put the money into the property and someone else manages it for you," Murray said.

By investing with a larger group in a number of different properties, the risk of financial loss is spread out considerably ÐÐ not so with a substantial investment in a single property.

"An REIT may have 500 or more pieces of property," according to Murray. "So if one has trouble, the whole (portfolio) will not suffer."

"Of course that is also the down side of it," he added, as this greater protection often translates to a less substantial return than when making your own choices and controlling your own destiny.

Kirk Heyle, owner of Heyle Realtors and Counseling Services, said investors ÐÐ especially single investors or those in smaller trusts ÐÐ should note that REITs may typically be more difficult to sell than stocks or bonds, and should normally be handled with a long-term goal in mind.

"You can't immediately liquidate without putting it up for auction or taking a huge hit," Heyle said. "It is really a longer term investment than" other options.

And as with any investment opportunity, the success of an REIT will vary according to market conditions and other economic factors.

"It is very similar to buying stocks and bonds," Heyle said. "You are going to flow with the market, and the property may or may not grow over the years."

In spite of their long-term potential, Realtors said that REITs have yet to really catch on locally, perhaps in part because of the lack of qualifying properties in the Springfield area.

"There are not many properties here in Springfield that qualify for REITs," Murray said. "The market here does not have the investment-grade property ÐÐ the large office, industry or retail properties" found in Kansas City, St. Louis and elsewhere.

Murray predicted continued success for REITs in the future, especially with conditions remaining stable and interest rates remaining low.

"As long as the overall real estate market holds strong, I do not see any reason why it won't get more and more popular," Murray said.

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