Top 5 Reasons to Invest in a REIT

Investing in apartment communities, industrial buildings, shopping centers, and any other real estate should be a heavily-considered long-term investment option. It is an investment type that is associated with only a modest risk with exceptional price appreciation prospects and the opportunity for high returns. According to billionaire Andrew Carnegie, almost 90% of millionaires acquire their wealth by investing in real estate. It is the most lucrative investment technique that is safe from the effects of inflation. There are various ways you can make real estate a part of your investment portfolio, but there is one that stands at the top — Real Estate Investment Trusts, or REITs. A REIT is an organization which operates income-generating real estate properties. It is where an investor can put their money into real estate by owning a portion of that real estate property which leads to the generation of dividend-based income. Investors have a variety of different options in this sector and these include equity, mortgage, hybrid, private, and many others.

Choosing to Invest in a REIT

Some investors can be skeptical about investing in REITs because of their high management and transaction fee and exposure to market risk. However, this type of investment is best for high-net-worth individuals and there are a plethora of reasons why people should consider investing in it.

Rich Dividends

The first and foremost highlighted feature of REITs is their dividends. The distribution of this investment type is higher than most assets. The current average dividend yield of notable REITs range from 2.5% to 7.5%. It is not uncommon for REITs dividend yield to surpass that of all other stocks.

Perfect Way to Diversify Portfolio

Another reason why many investors step into REIT investment is to take the opportunity to diversify their investment portfolio. The investment time offers unique attributes that none of the other investment options, such as bonds or stocks, offer. Other dividend stocks can offer somewhat similar outcomes but real estate exposure makes REITs outcomes satisfying long-term. Real estate portfolios can spread its roots locally as well as nationally.

Small Capital Requirement

An investor with their foot in REIT investment is at an advantage as it is an investment type that allows them to invest in real estate with small capital requirements. As investors purchase a portion of a property, it lets them enjoy real estate investment benefits, with a smaller commitment.

A Smart Choice for Both Wealth Accumulation and De-accumulation

Unlike other investment options, REITs are viable for both; well accumulation and de-accumulation. Investors can use this investment mode to compound their wealth which makes REIT investment a great choice for those planning their retirement. For de-accumulation, investors can choose a smaller percentage of total returns and spend only a dividend portion of the total return. In other words, as one retires, investors can live off of the dividends without affecting their principle investment. This provide flexibility, longevity and some certainty when faced with the question of how long after retirement one lives.

Stability and Durability

Why REITs are a popular investment option among high-net-worth investors is due to the degree of durability and stability it offers. It is a tangible asset that has a flexible, limited, and necessary value. These features make this investment type exceptionally durable and stable. Furthermore, given that REITs do not pay any taxes and losses are flowed back to the unit-holders, a majority of the dividends paid to them (75% to 100%) can be treated as Return of Capital (ROC) which is not taxed.

The long-term competitive performance, stable dividends, and a means to diversify a portfolio, make REITs a smart choice for investment. For anyone planning to invest in a unique area that is open to minimum risks, REITs are where they need to look. Real estate investment is one of the most lucrative options and REITs take things to another level.

InvestPlus Real Estate Investment Trust (IP REIT) is a private real estate investment fund, based in Calgary, Alberta. IP REIT is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of commercial and residential properties in primary and secondary markets in western Canada.  Management has transacted over $90,000,000 in buildings comprising of 21 locations in the provinces of BC, Alberta and Saskatchewan.  The current portfolio is appraised at $40,020,000 and comprised of 139 rental units and approximately 90,000 square-feet of rentable area. Schedule a discovery call with InvestPlus REIT today.

InvestPlus Predicts Increased Attention to the Western Canadian Real Estate MarketGood luck Paula! Welcome, Eilidh!

Share Your Thoughts

Your email address will not be published. Required fields are marked *

By submitting this form, you are consenting to receive marketing emails from: InvestPlus Properties Canada Ltd, 200, 4723 1st Street SW, Calgary, AB, T2G 4Y8, https://www.investplusproperties.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact