Investing In REITs - Are Real Estate Investment Trusts a Good Investment?
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- Опубліковано 14 чер 2024
- This video tells you everything you need to know about investing in REITs. From what a real estate investment trust (REIT) is and how they work, through to what the benefits, risks and costs are of investing in them. We will also look at how well REITs are likely to perform given the current environment and what REITs are available to invest in for both the UK and US markets.
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Your channel must have, hands down, the most informative and well researched videos about investing on UA-cam. I'm following over 100 channels in this category and all have strengths and weaknesses but PensionCraft is just great overall. Well done!
Seconded.
Hi M P that's very kind of you, thanks! Ramin.
What are the other top channels that you would kindly suggest?
I think more channels need to focus on being as informative and educational as his. Too many UA-camrs do napkin math and assume everyone on UA-cam wants cheap soundbites, kiddish memes, watered down explanations, and bloated promises of get-rich-quick schemes. The problem I'm seeing is TOO MANY UA-camrs have gone down that route when it comes to finance and investing. I think it's safe to say there's a strong niche for this category. I went through most of a free technical analysis UA-cam course to get the gist of what day traders are talking about, so now I'm here.
totally agree - well articulated and easily understood
This is hands down the best video on REITs Ive seen, and I've been binge watching them all tonight!
Thanks @redhot663 i'm pleased you liked it. A whole night of watching REIT videos show true dedication! Ramin
I worked as an economic analyst for many years. Solid video, my friend. Thank you. Subscribed.
Cheers Ramin, as always another fantastic video! Learnt far more from this channel over the last few months than I have in the previous 4 years - thanks to you I've got my act together and set up my SIPP w/ Vanguard.
Hi NZAnimeManga that's great! Thanks, Ramin.
Great post! Also, love the channel name!
Thank you for an excellent presentation without the extra unnecessary commentary. Please keep up the excellent work.
Thank you @Lone Star Elevators! Ramin
Great video! Thanks 🙏
My pleasure @gekkeredon
Very interesting and very accessible explanations for the REITs sector and risk/return trade-offs
Thank you Valentin. Ramin.
Thank you for the vid.
Our pleasure @Res Les
I like this vid. Good insight.
Thank you GerrysPlace , I am glad you enjoyed it.
Greate info. Thank you.
So glad you found it helpful Ahmed Shkara.
Greta content thank you . The best explanation I have seen
Thank you
Nice video. We work with lots of REIT's and know the challenges they face in a deleveraging environment.
Glad you found it helpful Luxus Häuser
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Great way to get started with low funds Start Today!
Good video Ramin. Why you didn't include the IUKP in the UK comparison? It's a big etf for the UK market. You should do other videos only for the UK market.
Thank you Ramin, yet another great video! For your subscribers who want to undertake their own research, would you consider dedicating a video (or a short series) on the steps of sourcing, presenting and analysing fundamental data for stocks, funds, trusts so that we can perform our own research? I love the content and feel if I could perform my own research I could relate even more to certain topics you cover. Thanks again for the fantastic content.
Hi Ramin, could you please make a video about investing in SP500 vs FTSE all world index? thank you
Very interesting as always Ramin. Thank you! Especially the part about the volatility of different REITs that nobody analyses in such a precise way. I wonder whether an expectancy for increasing interest rates might favour mortgage REITs over Equity REITs?
Hi Arsenio that's an interesting idea. As long as demand for mortgages doesn't fall that could be interesting. Remortgaging is going to be less likely now I suppose. Thanks, Ramin.
Wow...well done.
Thank you! Cheers!
Thank you for the great video. Right now, REIT underperforms others. I am wondering if I should cut loss now and switch to winning funds, so I should hold onto them and ride out the bottom. Do you have any advice / video / podcast on this? Many thanks!
Most people don’t know they can own real estate without much capital.
Agreed, or dealing with tenants often time consuming, frustrating and increasingly full of legalities. REITS also give payoff from large commercial developers.
The bank be happier than you though
So, you take the risk but in the time and effort, and if you’re lucky you would get 10% of return. It’s just a riskier more work yet slightly more rewarding approach, I think. I’m talking about the US though.
Perhaps I need to read a bit more into the risk and return of REITS first so that may be a no go for me already, but if it isn't I'm also concerned about the ethics (social responsibility), particularly of residential REITs.
Hey Ramin, thank you for sharing this great video, I do like your regression analysis and how to present it, If may I ask which program are you using for regression analysis? Many thanks!
Hi Dominik I use R and I also have some courses on how to use R for finance pensioncraft.com/courses-we-offer/ Thanks, Ramin.
Can you please provide a real-world example of the possible monthly/quarterly income a person can earn investing £10,000? Because every video I've watched so far there is much theory and concepts, but I still did not understand how to interpret those percentages and charts, translating them into money. Thanks and congratulations for your high-quality material.
Yields from REITs can be everything from under 1% to just below 10%. So you could make anywhere from next to nothing to $1,200 a year ($120 a month) for a $10k investment. But high-yield REITs generally are almost always bad companies losing money and you eventually lose equal amounts of the original $10,000 over time as the stock price goes down and the dividend yields are eventually lowered over time as well because of lower profits. To sum up, for a high yield REIT you could make $1200 but you’d likely be left with only $8800 or so of your original investment when you go to sell the stock after one year, this is fairly common for high yield REITs and stocks. I have a REIT, stock symbol PSA, that pays only only 2% dividend, making me just $200 a year but it’s stock price has gone up over 100% in the few years I’ve owned, making me thousands of dollars of paper gains where the dividend total has been like $500.
Do global reit Indexes, have exposure to warehouses like amazon warehouses. Or are they to heavily exposed to offices and high Street shops which don't look like they will do well going forward. As more companies seem to be turning to Internet sales and offices closing as more people working from home
Hi, how's that dividend yields are high, because of market price drop (mREITs)?
If you look historically the dividends for most of mREITs, they are pretty stable (take for example TWO, NRZ, or MORT)
6:30 the chart shows a UK REIT ETF and it is compared to two US ETFs. Shouldn't all ETFs shown be in the same currency for them to be comparable?
I buy a REIT fund in a 401k, been kinda buying a lot lately....mostly for the yield.....the growth is terrible.
Can you explain the calculation at 15:02. I found this interesting, at face value if something goes down by 60% and then rallies by the same amount, then the net effect would be zero, but that doesn't seem to be the case
I wonder if it is too late now to buy cheap data centre REITs
Do you think it would be good to start puttin money into data centre reits thanks ramin 🙏❤
I thought it was Yorkshire speak as in "reit then".
Hi James isn't that Geordie? Thanks, Ramin
PensionCraft most prevalent in Macams (Sunderland)
I've been saying it like "rates"
13:21 isn't quite right - UK REITs continued daily trading throughout both the Brexit and more recent market moves - as these are closed ended vehicles. It was only the open ended vehicles which have suspended withdrawals... but then holding an illquid asset in an open ended structure is just asking for trouble.
Hi Matt S that's right Investment Trusts are closed ended which is a good way to buy funds of illiquid assets as they don't get gated, instead their price drops below their NAV when they're out of favour. It's a point I make a lot during our PensionCraft Sunday evening calls. As the FT article at the end shows it's funds that got gated, you'll notice I didn't say REITs get gated. An ETF which buys REITs is open ended but that's very unlikely to be gated. However, illiquidity makes for difficulties in pricing during periods of market stress which would affect the entire asset class. Thanks, Ramin.
Could you talk us about investing in other countries in Europe? How about investing in Spain?
Hi Manu eL the point of REITs is that they let you diversify globally. I'm not aware of any REITs that trade on the London Stock Exchange which invest exclusively in Spain. There are several Spanish REITs that trade on the Bolsa de Madrid. Are you based in Spain? www.spglobal.com/marketintelligence/en/news-insights/trending/jkp5_6cecx60fdtybsmnua2 If you invest in just one country you're clearly not geographically diversified which is a risk. Thanks, Ramin.
Question please. 11:15. How can government bonds be considered as a good diversification, if all (the main) governments are illiquid? Surely were looking into the eye of the storm with regards to (whisper) Sovereign default?
Hi Graham the US Treasury market is probably one of the most liquid markets on the planet. It trades about half a trillion dollars of Treasuries each day. The likelihood of a US default is negligible, there are much greater risks to consider e.g. duration risk or the risk of high inflation. Thanks, Ramin.
Hi Ramin, do you have any thoughts on US vs. EU REITs? US seems to have higher dividend yields. Would you say UK might be riskier given Brexit but with same return potential?
Hi Mike I'd always go for a globally diversified REIT personally. GDP in the UK is in a bad place at the moment. Also I'd be very cautious about domestic bias in a portfolio whether that's equity or real estate. The whole point about REITs is that they do allow you do diversify across sectors and geographic regions so I'd take advantage of that. There are reasonably priced UK REITs e.g. if you go to iShares' website www.ishares.com/uk/individual/en/products/etf-investments#!type=all&fac=43530&view=keyFacts and sort by the sixth column (Total Expense Ratio) they have global REITs that are 0.17%. That's not a recommendation by the way! There are other REITs available to UK investors for low fees. Thanks, Ramin
@@Pensioncraft Thank you Ramin, interested to see the comment from someone in your videos regarding high dividend renewable energy companies, worth exploring too
Best REIT to be involved in? Thinking of investing in NRR.
SPY Bull or Bear this week
Many thanks for this video! One question - how did you learn all this information yourself? i’m looking to expand my knowledge outside of watching youtube videos? do you have a degree in finance/real estate ?
Hi @abi ampon I studied physics originally but if you take a look at this page on our website and scroll down you will the rest of my background www.pensioncraft.com/investor-education/about-us/
Not all REITs are equal I own a farmland REIT Gladstone Land which pays a monthly dividend ~ up circa 30% since Covid
I own Land as well it's the only single REIT I own. I bought in during the trade war while it was down.
Thanks for sharing that Fuscle Fuscle. That's a good point, which is why I mentioned sectors because things such as data centers are likely to have their revenues unscathed by the crisis. Thanks, Ramin.
Sweet
Great video, especially the correlation charts. But surely the liquidity problems don't apply to REITs as they are just publicly traded shares - you just sell your share to another investor, it doesn't affect the REIT itself. The gated funds were open-ended property funds where the manager has to refund sellers directly. The worst that can happen with a REIT is that it's share price diverges from the true value of its assets.
Hi Jonathan that's right the liquidity mismatch between the fund wrapper (which is often very liquid) and the assets (real estate) only applies to open ended funds that grow and shrink their capital based on demand. The FCA's talking about clamping down on funds like this. But as you say the price of a REIT can fall below its NAV which _could_ be seen as an opportunity if you think the NAV is correct and the fund is just unpopular due to a fall in risk appetite. Thanks, Ramin.
Good solid info from experienced speaker and one of very few on YT not incentivized to cover vaccine. Thx Ramin!
Glad you enjoyed it j mc.
It is highly risky to buy Reit during this Covid19 crisis? Residential or commercial Reit, which is advisable to you?
Look into data centre REITS.
@@Crixus5927 thanks..
How often do you get paid after investing in REITS
Is there a way for UK investor to invest in VNQ?
International brokerage account I think. Call your your broker. I've got the same curiosity, I like the idea of investing internationally. It's not a fund, but check out O, it's realty income. Maybe it trades on your exchange.
Great analysis.. But I'm not so sure that high volatility =high risk.
High volatility can be a friend to the long term patient investor.
Agreed!
Buying REITS within a tax free saving account is the way to go.
Reits would be a terrible idea in this lock down era, tenants just dont have the money.
a roof over their heads still more important than anything else.... also theres many reits, such as commercial, council, and elderly homes. Which have very little chance of not receiving their rent.
REIT has a different meaning in Yorkshire.
Can you hold REITS in an ISA 🙏
Yes
@@janco333 Yes but still might have to pay income tax on it. It counts as property income. Always double check .
can you find any REITS on vanguard uk?
Hi Ryan no there aren't any but I noticed that the Global Minimum Volatility fund (VMVL) I own has an allocation to REITs. The US version of Vanguard has REITs and allows you to buy funds from other asset managers on their platform. Eventually they might do this in the UK too I hope. Thanks, Ramin.
@@Pensioncraft yeah I hope they bring more of the ETFs from the us to the UK
Soo stay away from REITs then, noted!
Agree, i own a large reit, it is down 40% over the last 5 years.
Do a buy to let
Hi tom111 the difficulty with physical property is the amount of capital you have to commit to the purchase and the illiquidity of that investment. It could take months to sell a house but selling a REIT takes just seconds while markets are open. You can purchase a REIT for a few pounds but you can't say that about much buy-to-let property. Thanks, Ramin.
@@Pensioncraft Agree Ramin - but also the main downsides of REITs are that they can be traded with great ease, but the underlying properties the REITs own still have all the time considerations of the property market... so I think there is a liquidity mismatch... these funds should be closed end and sophisticated investors tend to look for that. Enjoyed the video and has sparked very interesting comments :)
A buy to let is a business, you have to do a lot of admin and you have to deal with people issues. Very different to a REIT.