Both foreign and domestic sources provide investment in the REIT market. REITs are owned by thousands of individuals, as well as large institutional investors including pension funds, endowment funds, insurance companies, bank trust departments and mutual funds. Investment goals for REIT share ownership are much the same as investment in other stocks--current income distributions and long-term appreciation potential. The majority of REIT shares can be purchased on the major stock exchanges, and orders can be placed through stockbrokers. Financial planners and investment advisors can help to match an investor's objectives with individual REIT investment. REITs also provide an annual report, prospectus and other financial information directly to an investor. Recently, mutual funds have emerged specializing in REIT investment and diversification. Some of the key elements in evaluating a REIT include: Management: As with any business, a key to successful performance lies with the expertise of management. However difficult for the individual investor, a couple of indicators used to assess a REITs value are its management's amount of experience as well as the length of time the management team has worked together. If a REIT has recently booked a new source of funds, it can be inferred that the institution providing the capital feels comfortable with the strengths and strategies of the REIT's management. Capital Sources: Because REITs are, by definition, obligated to distribute 90% of their taxable income to investors, they must rely upon external funding as their key source of capital. Investors must consider a REITs potential for future success, assessing whether individual REITs have the access to debt or equity capital sufficient to fund their future growth plans. REITs that have the ability to properly leverage themselves usually will deliver superior returns. Earnings: Net income under generally accepted accounting principals assumes that the value of assets diminishes predictably over time. However, real estate values tend to rise and fall with current market conditions. Funds From Operations (FFO) was adopted to address the problems with valuation and performance by excluding historical depreciation costs from the net income figure. FFO has become the industrywide performance standard for REIT operating performance, but other factors should be considered when evaluating a REIT's overall performance. For instance, if a REIT has a portfolio which includes older properties, its higher capital expenditure needs make its FFO value misleading to investors. Many professional REIT investors calculate cash flow after capital items (known as Cash Available for Distribution or CAD) as another measure of a REIT's performance. In addition, investors must also be familiar with the REIT dividend payout ratio as a measure of sustainability of dividends.

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