Comments on: REIT ETF? Or REIT Investment Trusts?

By: NoMoreTax

NoMoreTax — Mon, 08 Jun 2009 18:16:08 +0000

Nice article. I was reading this article and was wondering what the tax implications are if the investment is in RSP?

http://www.canadiancapitalist.com/how-withholding-taxes-affect-the-choice-of-international-investments/

Thanks,

By: AC

AC — Mon, 11 May 2009 18:59:55 +0000

Buying a real estate investment trust etf maybe a simple way to get exposure to a basket of REITs if that’s all an investor wants.

However, there is a reason why most REITs are yielding greater than 10% and some as much as 30%; namely perceived risk.

More often than not, when a REIT has financial difficulty, it will be the unit holder’s distribution that will be cut or eliminated. The effect of which will not only negatively affect the distribution but often it will severely affect the REITs price per unit, resulting in a double whammy.

Many REITs are paying in excess of 100% of Distributable Income including by our analysis RioCan REIT, Canada’s largest REIT. Others have debentures and mortgages coming due without much hope of replacing and all are at least dealing with a contracting economy and all its related manifestations.

Buying even an eft without proper due diligence is simply reckless.

AC
REITinvestor.ca

By: –› Weekly Roundup: Oscar Edition

–› Weekly Roundup: Oscar Edition — Wed, 18 Feb 2009 22:25:09 +0000

[...] Buying REIT ETFs or investment trusts? at Quest for Four Pillars. [...]

By: Four Pillars

Four Pillars — Fri, 23 Jan 2009 19:56:40 +0000

Paul – I don’t give specific investment advice.

I would suggest that you take a look at your asset allocation and decide how much reits you want to have and then buy/sell accordingly.

As for my asset allocation I have given serious thought to convert some of the 20% fixed income to equities over the next little while.

By: Paul

Paul — Fri, 23 Jan 2009 18:55:55 +0000

I am thinking of redirecting some of my RRSP investments from equity to REITs through a self directed RRSP. I am 40 and have about $60,000 in RRSPs – after they declined over 25% last year.

I realize there is no loss until I cash in, but would you suggest redirecting some to REITs given that most REITs seemed to have a tough year as well? What % would you recommend?

Also curious as to how many readers are continuing to invest through a monthly plan or just a lump sum (wait and see)?

Thanks!

By: Jordan

Jordan — Thu, 11 Dec 2008 09:07:48 +0000

Mike have you posted a follow up to this idea of unbundling XRE? You and CC make a good argument and I’m thinking of doing the same thing, but I’d like to know if you ended up doing it, what % of the index you’ve decided to use or have any new insight into REITs. Thanks!

By: Nawar Alsaadi

Nawar Alsaadi — Tue, 25 Nov 2008 07:06:30 +0000

H&R Reit (HR.UN) offer excellent value here

Upon doing further DD, I have purchased significant position in H&R this morning, I believe the unit price already reflect a possible 50% cut in the payout, while the current market cap gives ample protection in case of asset sales in a depressed market.

Thus getting an average of 14%/15% dividend (assuming a 50% cut), while waiting for the equity to appreciate back to book value $15+ seems like an excellent deal.

Finally, it is worth noting that 50% of H&R loans are none-recourse financing, thus in an event of an issue of those loans, the risk will be limited to the underlying property and not the whole company.

any comments welcome!,

Regards,
Nawar

By: Four Pillars

Four Pillars — Sun, 23 Nov 2008 14:45:42 +0000

Thanks Andy – plesae let me know what you find out about the various REITs – that would make a great post!

By: Andy

Andy — Sun, 23 Nov 2008 11:02:01 +0000

Mike: You might also want to look at which REITS will survive after January 1 2011.
My understanding is that Chartwell does not qualify as a REIT after 2010 [two years from now]
I think this is important because a person may buy a REIT now with 10% yield but it may only be 5% after 2010.
I have begun to write to the REITS and I asked them “Do you qualify as a REIT after 2010?” None of them qualify of those that responded so far. Not even Rei.un. Rei.um said they are working on qualifying.Andy

By: Four Pillars

Four Pillars — Tue, 26 Feb 2008 04:45:38 +0000

Betty – thanks for visiting.

It’s a tough call since it’s more work to buy individual REITs and I’m not sure how much overlap there will be. I’m going to do some more research and will post again.

Mike