If you want to invest in the real estate sector and you don't have a house or enough money, real estate investment trusts (REITs) are a viable option. They sell like stocks on major exchanges and one can invest in real estate through properties and mortgages. They receive special tax considerations and offer investors high yields as well as a highly liquid method of investing in real estate. The performance of the REIT is determined by the value of its assets in real estate which an advantage. They are not tied to bonds and shares. REITs are less volatile and offer some degree of protection against inflation.
Thanks for explaining that remnant, because although I have heard the term, I had no idea what they were. You made things quite a bit clearer, so for that I thank you. I think a diversified portfolio like everyone says, is a great investment,and it seems like it could include some of these REITS. Thanks for posting. It was very informative.
Just like kgord, I never had any idea about REITs that's why I usually pass by threads about it whenever I see one because I thought it was a complicated topic. Now that I read your explanation, I have somehow been enlightened about what REIT is all about. Thank you for explaining it in such a simple and understandable manner remnant.
Yes, I have. I did in the early-to-mid 2000s and did pretty well with it. I got out before the collapse, so I made some coin. Candidly, I got out too soon, but I suppose that is better than too late. That said, some REIT offerings are a pretty nice investment and I think it is part of a well-rounded portfolio.
Yes I've got a couple of mainly residential REITs in my portfolio. Better diversification and less hassle (as well as less starting capital required) and better liquidity than investing into real estate on my own. The yields are, in general, higher than what I would get in my area anyway and on top of that I have professionals managing the whole thing.
I haven't yet got into it but I intend to in a year or two once I have some decent savings to invest a percentage of that money in REITs. Did some research late last year and learned that the yields could be up to 10%. For someone who wants to take on very little risk REITs could get them some decent returns on their investment.
I hold one or two REITs in my current portfolio, just in the name of diversification. Because it is back by property there are tangible assets available (I hold equity REITs, not mortgage REITS) and that keeps the price somewhat stable. The only thing you didn't mention about REITS in your breakdown is that they also tend to give a good dividend income, since they have to give out 90% of their taxable income as dividends. I actually picked my first one up as an income investment, because it gave a good quarterly return.
I have invested in them in the past but currently the returns on the ones I can get commission free are pretty sucky. So I use other sectors to diversify. Maybe in a year or two when the real estate market crawls back out of the sewer where it currently seems to be floating. (That being why what I invested in last year was an actual property, because it was cheap and interest rates were as low as they are likely to get any time soon).
We don't have that in the Philippines but if ever, I'm sure it will be a hit because there are lots of employees here who have no home of their own. They have the capacity to pay the installments but they have no big money for the downpayment. And for those with downpayment money and with the capacity to pay the installments have difficulty in securing mortgage from the bank. That's why real estate is booming particularly the condo because it is easier to acquire than a house and lot. Condo building have a self-financing of their own that greatly eases the burden of applying in a bank.
