Beck-REIT: Real Estate Investment Trusts

Upon checking on our most recent web analytics, it seems we often appear in searches for Austin REITs!

Funny how one of our namesakes also happens to be the acronym for Real Estate Investment Trust!

At first we found the realization to be an ironic affirmation of our chosen field of expertise, but after further thought we realized this would be a great opportunity to educate our community on the difference between REITs and the type of real estate investment we conduct. Both methods have significant advantages and drawbacks, and the distinctions are essential for anyone hoping to break into the real estate investment market.

So what is a REIT?

Real Estate Investment Trusts are like stocks. Buying into a REIT is essentially investing in a mutual fund; a pool of investors money that maintains, grows, and profits off of a portfolio of income-producing properties.

REITs are advantageous in that they allow investors to profit from real estate markets without having to own, manage, maintain, or finance actual real estate. They lower the barrier to entry significantly.

Another pro of REIT investments are their potential returns. By law, REIT’s must distribute 90% of income to shareholders, meaning high dividend yields.

There are, however, some significant drawbacks- namely in the area of tax incidence. Most REIT’s incur a higher tax on dividends. And, because REIT’s aren’t physical real estate, shareholders can’t personally take advantage of many city and state-specific tax property tax incentives.

So why Beck-Reit?

Well, when we started as a General Contractor 21 years ago, our founder Russell Becker went into business with a long-time friend and mentor named Norman Reitmeyer. And thus, Beck-Reit and Sons was born.

We are not a REIT in the mutual fund sense, but we do invest in Commercial Real Estate, and help others to do the same! Investing in physical real estate is more risky than a REIT in many ways - it’s less diversified, requires more working capital, and manifests as a physical thing that requires maintenance and repair. Still, over the past 21 years we have found commercial property ownership and management to be a profitable and fulfilling endeavor, the fruits of which we’ve seen reflected in the business mix and communities that surround our properties. So we may not be an Austin Texas REIT, we are an Austin Texas Commercial Real Estate Brokerage and Property Management Company

So, as a General Contractor, Brokerage, and Asset Management company, Beck-Reit helps our clients do the same.

~Hiatt Becker (one of the Sons)