Real Estate Investment Trusts for Dummies



https://www.commercialpropertyadvisors.com/blog/ Learn the basics of Real Estate Investment Trusts (REITs), how to invest in them, the benefits as well as the disadvantages, are they right for you and perhaps most importantly, would it be better to invest in commercial real estate on your own versus in a REIT.


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29 thoughts on “Real Estate Investment Trusts for Dummies

  1. Superb video! However, would REIT "Lack of Diversification" be that relevant if one had a whole portfolio of cross-industry REITS? For instance, one owns 20-30 REITS including malls, storage, medical centers, infrastructure, industry, etc? would one go into business, considering "losses" a benefit or "wonderful losses"? I get the tax benefits, but if I invested in real estate rather than REITs, and I have a too many losses, in spite of the tax write offs, I could become insolvent and have to go out of business, defeating the purpose of why I went into real estate as a business in the first place. If I invested in a good REIT that is misplaced (undervalued) I wouldn't sell it (loss write off), I would buy more! The REIT would be on sale! That's a good thing. The biggest issue with real estate is that unless you have a lot of money (millions) or financial backers (partners), you can run out of funds very quickly if the property has any of a number of issues and problems. What you don't mention is the problems in real assets: poor or destructive tenants, tied up funds, deteriorating or lack of occupancy, potential painful legal issues with other partners or the city. The list goes on and on. I would take REITs over real estate by a long shot, especially for the fact that it's immediately liquid (when the market is open) and I can have access to funds for another purchase in seconds, not days/weeks/months. Secondly, it requires NO WORK!!! Dividends baby!!! A single buy click on my computer on a good REIT, and I'm making money by doing nothing more! I've seen too many get hurt with real estate when the economy takes a dive and they lose tenants or their property is destroyed by tenants. That's just me though.

  2. If i start small and get bigger what kind of licence do i need to allow people to invest into my company so i can buy more properties and distribute profit to my investors on monthly basis. Example cardon capital.

  3. I realize that I wouldn't be able to loss harvest or write off the depreciation in a REIT, but surely the REIT itself is doing that anyway? In which case, I'm already enjoying the tax benefits. In fact, I'm probably enjoying them more than I would on my own because they can afford better tax accountants.

  4. I don’t understand how REITs work with buying it like a share. Say for example you buy 100 shares of REIT for $200 a share. You hold on to that REIT for several years and you get your dividends paid out, but over time the REIT share price is down from when you purchased it and now it’s $140 per share. How does this work if you want to sell? You’re selling at a massive loss. No one talks about timing entry of REITs to selling REITs. Are dividends more important than the entry and exit price of a REIT investment?

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