Do You Guys Invest In REITs ?
Do you guys invest in REITs? I recently talked to a licensed financial planner and she said that her firm achieves an average 22% return for clients through investing in REITs... What am I missing? If this is true than why would someone be a landlord and deal with leaky roof, broken toilets and deadbeat tenants and make about the same ROI?
Sorry, I am totally clueless when it comes to stocks. Can someone explain? :-?
Hey,
REIT investing can be one piece of a balance investment portfolio. They have several very interesting aspects related to them, such as the payout of income.
REITs have done very well in the last few years, but I would be interested to know how many years they maintained 22% average return.
I've invested in REITs over the last few years and seen some nice gains.
But I recently dumped all of my REITs for two reasons.
First, my portolio had become way to RE heavy. I needed to diversify. Four years ago, it was tech heavy and I learned my lesson the hard way, to the tune of a 60% loss in 2000. Ouch!
Secondly, there was just more money to be made in the tech rebound that began on March 11, 2003. In one year, the Nasdaq skyrocketed 60%. It was clear to most that the beaten down tech sector would outperform REITs.
That said, there are obvious advantages to REIT investing. During the past 25 years, the average annual return offered by the REIT sector was 14.7%. During that same period of time, the S&P 500 has annualized roughly 7%. And as for REITs vs. RE, like you said, there are no leaky toilets to fix, tenants to evict, etc.
But for me, I prefer tangible RE over REITs. I personally like to be able to drive up and see my RE investments. But more importantly, I want direct control over my assets. With REITs, you're relying on a fund manager and other faceless entities at the RE investment companies you're investing in to indirectly invest your capital.
In short, you're relying on their investing acumen.
Frankly, I'd much rather rely on my own financial literacy. My REIs have an annualized ROI of roughly 30% over the last four years.
And I don't know any investment that can beat that year over year.
Good luck.
[addsig]
mkdurham, bruce, monkfish, thank you all for your replies!