REIT Investing - Is Now A Good Time To Buy?

Real estate investment trusts (REITs) provide a high income alternative to stocks that over the long term have generated a comparable return to stocks. This year there has been a brutal selloff in REITs which has produced some opportunities for investors. So what are REITs, where are the opportunities now, and what are the risks associated with REIT investing?
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Timestamps
00:00 Introduction
00:31 What is a REIT?
06:29 Higher Interest Rates
09:31 High Dividend Yield
11:17 Risk
13:30 Conclusion
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[@harrywilliams7866]

Please do more on REITs! Very useful video - Thanks!!

[@badass6656]

Good video. No mention of gearing or difficulty in trying to grow since all income must be distributed. REITs tend to be continually issuing new shares or borrowing more to acquire property.

[@Peter-MH]

And put them in your ISA if you’re in the U.K. to save paying 20% withholding tax on the dividends!

[@ilsevanheerden4976]

I had to Google that. Can I do that with any bank? I live in luxembourg and have been looking for a way to minimize my taxes on a REIT

[@georgea3575]

@@ilsevanheerden4976 ISAs only available to UK tac residents

[@michaelhutchinson2854]

@@raees2945 yes they could

[@caparn100]

Thanks, I didn't even know you could buy REITs in the UK.

[@nataliaregina3094]

wow fantastic! So informative - I'm new to this topic and am very thankful for such an easy and informative presentation here, helping to teach and educate - thank you, good high quality content rather than just another KZbin fluff piece!!

[@Pensioncraft]

Hi Natalia, thanks that's very kind of you, I'm glad you found it helpful! Ramin.

[@fabianaa.1800]

Most informative video about REITs I've ever watched. Thank you

[@Pensioncraft]

Your Welcome @Fabiana A.

[@bipolarpunt5721]

I am looking at NorthWest Healthcare REIT in Canada, it only own Medical buildings/clinics and Hospitals. It has a 8% Dividend and a 8.5 P/E. I am thinking Healthcare is normally funded in some way by Gov and Medical is the last thing people will give up, making this a more stable option. Do you have any reasons this is not more secure?

[@frbuccoliero]

Thanks for the video. What do you think of Ben Felix's notes on REITS? Citing Peter Mladina's paper REITS cannot be considered a separate asset class, as their returns are achievable through 60% small-cap value stocks + 40% HY bonds, and exposing to REITS only implies exposing to their uncompensated idiosyncratic risk.

[@chappasuk1]

Firstly may I say I enjoyed your post. I don’t normally comment as I find there’s always somebody out there looking for an argument, life’s too short. However, I did want to state that I own a number of both U.K. and US REIT’s in my SIPP and ISA. I have invested in them as a way of boosting my income as I’m retired. The sector, as you stated has taken a hit recently although certainly a significant number of mREIT’s in US have the majority of their lending floating rate which has benefited for the recent rises in interest rates.

[@vinayakpatil4056]

Interesting video. Thanks for explaining why dividends look attractive even though real estate is not doing so well in the UK. I have some questions for knowledgeable audience. 1) Many REITs show NAV (Net asset value) much higher than the valuation, how to identify if there is a trouble brewing behind the scene. Is it a sign that the REIT is in trouble? 2) The example of INTU shoping centre going into administration, surely if they have assets, those will be liquidated and paid back to share holders (Unless of-course their debts are higher than assets)? How to identify total debt of REITs? 3) Is there any managed mutual fund catering REITs that will allow me hands-off approach? (similar to mutual funds).

[@audriusurbonavicius5428]

Some REITs offer higher dividend yields and then charge high administration fees. 😀

[@rightangletriangle3188]

Thanks for sharing. Great info about REITs. Have individual REITs in my dividend portfolio and they are behaving ok this year considering the bad market that we are in.

[@torus186]

I don't like them, fund charges can be high I've seen over 2% which is great on a 4% yield. Plus if they are held outside an ISA or Pension you have a 20% withholding tax to pay on earnings.

[@evilzzzability]

REITs have got even cheaper since this video was made... I think they look quite attractive now and the risk/reward play is in their favour. Very easy to find real estate companies yielding 7-8% or even higher, with progressive dividend policies that are supported by reliable income from defensive business models, which are also inflation linked. The moderation of expected rate cuts has tempered their recovery, but I these will be re-rated higher as economies slow down and the central banks finally cave in to rate cut pressure.

[@richardthomas7103]

Great vid thanks , I have a little warehouse reit , I might buy more soon maybe

[@Pensioncraft]

Glad you enjoyed it @Richard Thomas

[@ilsevanheerden4976]

After months of searching I finally heard about EQQQ - I don't want to pay US taxes so wanted a european REIT. Any thoughts on it? Also, on Interactive Brokers, it seems I can only buy it off the Italian exchange in €!

[@robweinberg9396]

contagion from blackstone's BREIT?

[@robertcliffort2354]

great.

[@ebrahimhabib477]

Very educational video

[@Pensioncraft]

Thank you glad you enjoyed it @ebrahim habib

[@TheNimbleNomad]

Thanks for this video.. Are you able to do a video on.. REIT funds in the UK? Also how does one perform valuations on REITs? I’m an equity guy so this is quite different for me to value..

[@Pensioncraft]

Hi @The Nimble Nomad Thank you for watching! Here's a link to the most my most recent REIT video and I cover both the UK and the US. kzbin.info/www/bejne/iZzXd6CMZctsmqs

[@djpuplex]

Good time a great time. Wish I had room in my retirement accounts. I'm praying REITs are still beat up after January 1st.

[@colinevewright]

I personally wouldn't touch UK REITs, only high quality US ones for me such as WPC, O, AVB etc

[@george6977]

REITs have high charges so I prefer a low cost, diversified index fund investing in stocks.

[@curioussand1339]

Short answer, NO

[@pedroernesto6941]

In Brazil REITs are call FII, they mostly give a monthly income, that is free of taxes if you have less than 10% of the total shares, you still pay capital gain taxes if you sell with a profit, they must pay shareholders at least 95% of it's income, it' still a young market but growing

[@eweng903]

Would have thought you could more simply invest in the UK footsie indices if you want exposure to REITs. There are loads of those listed on the LSE.

[@OneBiteoftheCherry]

But are they on the FTSE 100?

[@MadderPrinciple]

Great video - for the reaasons given I have tended away from individual REITS but ETFs are a good way to learn about their complexities, invested in IUKP to test this asset class out!

[@PaulBriscoe]

Hi Ramin, great video, I've been writing one very similar recently. I have one problem with your reit returns data comparing big box reits vs shopping centre reits by 1 year return. while absolutely this year the shopping centre reits have out performed (performed less bad) this year over 3-5 year new river must be down 70%+ vs tritax roughly 0% capital appreciation (excl dividends). You did point out intus demise but suggesting that the performance of new river vs tritax is significant data is missing much of the story.

[@mattsennett]

My US investments made since the summer have been messed up by the very recent drop and also the strength in the pound since mid October. This is only a paper concern but still one of the issues we face when buying in the US.

[@mattsennett]

@P J yeah it's something that luckily isn't a major financial headache for me and something I will unwind in my favour during 2023 eventually 👍🏻

[@myafrosheen]

The issue with UK vs US reits is the very expensive ongoing charges of UK reits compared to the US ones which don't have this expense

[@Kawasakifreak1]

Shocked today to find AIRE & SREIT each have annual Mgt fees of over 3.2% & transaction fees of over 2.6% - not interested.

[@myafrosheen]

@@Kawasakifreak1 for whatever reason people rarely talk about the fees for UK REITS and Investment Trusts

[@paulhill2366]

I have been reading about value investing recently and came up with a process for picking assets and added a few REITs to my trial portfolio which I think are undervalued. These were £IHR £SOHO £LMP and £SHED. We'll find out if I've made a mistake lol.

[@toezdennis9]

Keep hold of them !! More you get more dividend you get even if the value drop

[@paulhill2366]

@@toezdennis9 Yes, I've only just bought them because the price looks great (below intrinsic value)

[@arigutman]

REITs are great investments to park cash during a high inflationary environment like we are living in...

[@somshridhar]

I can not see the pictures from your presentations as always. 😅 why

[@drescherjm]

As a US citizen I have 2 main concerns about RIETs. #1 The US government and its tax laws. I am concerned that the could change the rules making the value of my investment much lower. I got burned pretty badly by the current president who made declared that 1 of my stocks I as no longer a legal business (its in court but I sold having lost 1/2 of my investment). #2 What percentage of a diversified portfolio should be the max for RIETs for someone in their 50s who will be retired at some point in the next 10 years.

[@kygo]

I don't understand how people can say REIT's are "high income", most will net a ~4% yield? But then you have the high fees to pay on top of that... And I don't understand why the yields are so low, any chump with a bit of effort could go out and buy a random house and get close to a 6% yield, and with leverage turn that into say a 15% ROI. So why can't big professional companies with lots of expertise and scale not do much better.

[@kygo]

@P J Honestly I can't see any reason to buy a REIT other than to line the pockets of the people running it!

[@BigHenFor]

Blackrock investors are definitely on the negative side. So, they are risky, and it should be said that housing and commercial property will take a dip and there is a recession on the way.

[@andreaisonline]

You mean Blackstone?

[@isamalikhan6322]

Potential increase in FED rate leads to risk in investment in reit

[@warrensalsa8407]

I invested heavily in Tritax about 7 years ago 😪

[@jessecuster4662]

Did you sell ?

[@warrensalsa8407]

Unfortunately not :(

[@jessecuster4662]

@@warrensalsa8407 I’ve been buying Tritax for the past 4 years too. I’m just going to keep buying. Great company

[@kschumacher4968]

Great video and great timing. I recently withdrew from my REIT, the dividend yield was attractive over 5% however I’m trying to adopt a more low cost investment strategy and any charges over 2% are just not worth it for me! Would you suggest an ETF REIT?

[@mario7027]

iShares UK Property ETF with InvestEngine has a fee of just 0.40%

[@mario7027]

and they also have the EU and US ones.

[@kschumacher4968]

@@mario7027 thanks for replying, will definitely check this out 👍🏼

[@its1me1cal]

What REIT ETFs are there?

[@rightangletriangle3188]

In US, the most common one is VNQ from Vanguard. I think VNQI is the equivalent one for international from Vanguard.

[@its1me1cal]

@@rightangletriangle3188 thanks 🙏

[@quokkapirquish6825]

REIT petite

[@artkrueger8312]

In the US, you have to pay your full income tax rate on the dividends. If you're still working, almost half the dividend goes to taxes.

[@wesley5nipes]

Doesn't that depend on your bracket, though? You'd have to be a really high earner to get up to almost half the dividend going to taxes, wouldn't you?

[@sqmus]

Qualified dividends are taxed at a lower rate than regular income. Nevertheless, what you are describing would be a 50% tax rate, which doesn’t exist. You can see the income tax brackets and rates on the IRS website.

[@rolfjohansen5376]

where is the dog?

[@Pensioncraft]

Hi Rolf, Teddy is sitting at my feet right now. He runs away when I'm recording videos because he doesn't like my loud voice 8-) Thanks, Ramin.

[@rolfjohansen5376]

@@Pensioncraft Teddy is wonderful, adding an extra dimension ...

[@Sammy-uv1kl]

Stay away from REITs we are witnessing house crash 2.0

[@theroadlesstraveller1296]

Reit's getting crushed now!

[@fern8580]

📌in all modesty I have the impression that you stuck to the 70s or 80s why? there is no longer a penny to be made via the "stock market" or via "REIT" why? and the stakeholders (through their work) and the State (through taxes) take most of the gains! Definitely, this must push the "saver" to invest where there are the fewest stakeholders between him and money (real estate, entrepreneurship, diplomas in the health sector)

[@carsonc4134]

What the hell are you talking about? Stakeholder?

[@tastypymp1287]

Jibberish.

[@fern8580]

📌Reit, 📌stock ... are out ! charge high administration fees+high state taxes !

[@prancer4743]

Sell sell sell sell 😳👀🥹😮🥹🤔🥹😜👍 before it’s to late sell 😢😊😊