Real estate can be a great investment if you can afford the property when the landlord headaches down payment and processing. Sounds like more trouble than it’s worth? Consider investing in real estate investment trusts.
Own property REITs are large landowners rent the apartments, office buildings, shopping malls and other types of real estate. After REITs must distribute 90% of net income, covering expenses, so that they pay steady dividends. Many real estate investment trusts plus interest expense, because they raise the rent, upgrading buildings, buy or develop more performance.
For income investors, real estate investment trusts may be a better choice than high-quality bonds or common stock. The average properties REIT recently produced 4.1% and 2.4% and 10-year Treasuries yield 500 a payout ratio of the above 2% of the S & P stock index.
Of course, most real estate investment trusts are unlikely to superstar in today’s market. Interest rates may increase in the coming year, increase financing costs for the owners. And higher-yielding REITs will increase relative to long-term bonds, which will put pressure on the attractiveness of REIT stock. In addition, some REITs have seen decline in rental demand, it is worth noting that the company’s own stores. Competition from online retailers is hurting big tenants such as department stores, real estate investment trusts squeeze revenue.
However, some real estate investment trusts may produce good returns, even if interest rates moderate growth. We found that riding a powerful high-tech development trends, and so on. Their own data center, for example, or warehouses, distribution centers, which have a clear conscience and booming online retail Gro. The stock yields lower than the average real estate investment trusts, but they should more than make up the difference and share price gains. For investors who want higher returns, we find that real estate investment trusts should adhere to prosperity, and a small company of high-quality shopping centers, can produce 7.1% of apartment buildings more stable.
It should be noted that the majority of REIT distributions for tax purposes, if you are in a high tax rate can sting ordinary income treatment. The following is based on the estimated profit from operations (FFO), represents the net profit plus depreciation expense joint REIT funding measures. All prices and other data through October 31
Alexandria Real Estate stock (marked price $ 124 dividend yield of 2.8%)
Alexander specialized properties for the life sciences industry. Companies such as biotechnology pharmaceutical company Amgen (AMGN) and Alexander gene sequencing company Illumina, Inc. (ILMN) lease space, as do medical institutions, such as the Dana-Farber Cancer Institute. These are to pay their rent and cover most of the operating costs of properties, such as tenants insurance and taxes. They rarely vacate, in part because it would be too costly to rebuild the-art facilities elsewhere.
Alexander is developing agricultural science and technology park in North Carolina’s Research Triangle Park. The REIT is to attract new tenants, such as Facebook (FB), other properties. Real estate investment trust specializing in long-term growth market indicates Ernesto Ramos, BMO Growth Fund Managers, which owns shares, said, lexandria. Analysts expect FFO per share to its 8.8% level in 2021 rose 2017 points.
Digital Realty Trust (DLR, $ 118 3.1%)
The figure is one of the largest owners of data centers. Huge, climate-controlled building, the computer and network equipment companies. Companies such as Amazon.com (AMZN) and Microsoft (MSFT) in the search for such a digital city square golden point, to support their services. And they want to be close to each other to exchange data as quickly as possible. “Data centers can charge tenants take two feet of rope and a computer connected to another,” Fidelity Real Estate Investment Portfolio, owns shares of digital manager 史蒂夫布勒 said.
Income
Real estate investment trusts are rising as the company opened a campus cities such as Chicago and London. digital recently merged with rival DuPont Fabros, extended -ING service to more locations. With FFO expected 8.6% rise in 2021, so if the number of expenditure.
GGP (GGP, $ 19 4.5%)
Investment in GGP, a large retail owners need some confidence in online sales will not kill the mall business. These concerns have said in the past year fell by 17.4%. Matthew Werner, West Link Real Estate Fund, which holds shares comanager said, but now looks very cheap REIT, its business trends gleaming. More than
80% of the company’s assets are high-quality shopping centers with strong occupancy rates, he said. GGP cash flow (capital expenditure) should accelerate in the next two years, enabling the company to hike its dividend payout ratio at 8% annual. GGP can also get one-third of a takeover offer from Brookfield Asset Management (BAM), which owns about GGP stock. For help deal of potential, “the floor” under the stock, said Werner, preventing it from drifting much lower.
Independent real estate investment trust (IRT, $ 20,7.1%)
Independent, listed in the 2013 housing REIT, owns the Midwest and southeast 47 garden-style apartment property, collect rent this average only $ 978 per unit. This tight supply and strong demand for affordable housing, help maintain the integrity of the independent occupancy rate of 94%. The upgrade of the apartment REIT, its purchase, install new flooring and facilities such as laundry dryers, support higher property values and rents.
Like any small stocks, real estate investment trusts, the market value of only $ 718 million, more than likely, a more stable business more unstable. And just a couple of bad real estate deal may outsize profits on the company’s results. But the company’s financial situation is improving, its leasing business looks healthy Werner, real estate investment trusts his fund holds stocks he said. Although he does not want real estate investment trusts, in order to increase its dividend in the short term, he believes the stock could reach $ 11 on the next two years, producing a total return, including about 18.5% in that period of time dividend.
ProLogis (PLD, $ 65 2.7%)
With the expansion of online sales, warehousing and distribution center has become a key high-tech shipments and revenue intersection. As the world’s leading owner, so real estate developers, and looks ProLogis located profitability.
Nearly half of the company’s properties in densely populated coastal areas, such as Los Angeles, New York and New Jersey credit points to deal with global shipments. Even in the construction of logistics centers more focused, the company has maintained a healthy occupancy rate of 97%. Fidelity’s Buller, his fund holds shares of ProLogis, said Stephanopoulos should also benefit, as traditional retailers more goods in store pickup and return of online sales.
Expected ProLogis FFO is released about 8% per annum over the next three years, the support of about 11% to an estimated total return of the year. Although the share price has been in the past year, including dividends has gained an excellent 27%, should continue to be a winner.
Other ways to invest
Investment does not want to buy stocks ORS who can get exposed to real estate investment trusts through exchange-traded funds or mutual funds.
Wherein the ETF, it is our preferred US Schwab REIT (symbol SCHH, $ 41 3.7%). The ETF tracking the 102 largest real estate investment trusts in the United States, including indicators of residential, office and retail property owners. We are optimistic about the wide variety of the fund and its underlying expense ratio. The ETF charges just 0.07%, or 70 cents per $ 1,000 investment each year.
Go out for help in the iShares iShares Global REIT ETF (REET, $ 25,4%) over a bump yields the purest American real estate fund. The ETF holds 65% of the US real estate investment trust assets, shares in a foreign country, such as the Hong Kong-based The Link Real Estate Investment Trust’s rest. Cons: Investors face a number of foreign markets and currency risks associated with the Fund.
In a mutual fund, Fidelity Real Estate Investment Portfolio (FRESX, 2.6%) has accumulated a strong record, beating the 10-year average real estate fund category and pulled ahead in its past 10 years, including eight peer group. T …. Rowe Price Real Estate (TRREX) has been a solid performer, too, although not as strong in recent years. Both funds charge around 0.75% of the expense ratio, 1.16% of average, below the real estate equity mutual funds. T. Rowe Price does not report standardized yield on the 30-day (for the above proposals), but at 2.5% annual rate in the last 12 months, according to its recent share price allocation from the Fund.